FX.co ★ Brazil Manufacturing PMI Returns to Contraction

The S&P Global Brazil Manufacturing PMI slipped to 49.1 in May 2026 from 52.6 in April, signaling a renewed downturn in factory activity after the previous month’s expansion. Survey data showed that manufacturers halted stockpiling, as both purchasing activity and output declined in response to softer demand. Total new orders fell for the fourteenth month in a row, while export sales contracted sharply, with tariffs and the conflict in the Middle East weighing heavily on external demand.

Supply-chain conditions remained highly strained. Vendor shortages and the impact of the Middle East conflict led to one of the steepest lengthenings in delivery times in nearly four years. Consequently, input cost inflation held close to record highs, driven primarily by rising energy prices, and output prices were raised at one of the fastest rates since 2021.

Despite these challenges, manufacturers stayed optimistic about future production, citing expectations of better economic conditions after the presidential elections and a hoped-for resolution of the conflict in the Middle East.