BRASILIA, Dec 2 (Reuters) - The pace of expansion in Brazil’s manufacturing sector accelerated in November from the month before, driven by the strongest growth in output since March last year, a survey of purchasing managers’ activity showed on Monday.
The IHS Markit Brazil manufacturing purchasing managers index (PMI) rose to 52.9 from 52.2 in October, the fourth consecutive month of growth and the second fastest pace this year.
A reading above 50.0 marks expansion in the sector, while a reading below signifies contraction.
This suggests the economy continues its gradual and steady recovery having flirted with recession earlier in the year, supported by record low interest rates and low inflation to boost real incomes.
“Buoyed by an upturn in new orders from the domestic market, goods producers ramped up output to the greatest extent in almost a year and a half,” said Pollyanna De Lima, principal economist at IHS Markit, referring to the output index’s jump to 54.9.
On the other hand, even though the employment index rose to 50.5 from 50.1, the labor market remains an “Achilles heel” for the prospects of a sustainable economic recovery, de Lima said.
In addition, global trade tensions and economic difficulties in neighboring Argentina continued to weigh on the external sector.
Export orders fell to their lowest level since December 2016, even though the Brazilian real has weakened in recent months, with the new export orders index falling sharply to 44.9 from 47.9 in October.
“International trade fell for the third month in a row, and at the quickest pace in almost three years, with the real’s weakness failing to generate external orders and firms continuing to mention subdued demand from Latin American nations,” De Lima said.
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