BRASÍLIA: Brazil’s manufacturing downturn accelerated in February as higher inflation increased costs across the production chain, a private survey showed on Tuesday, suggesting the country’s recession continued to worsen in the first months of 2016.
The Purchasing Managers’ Index BRPMIM=ECI compiled by research firm Markit fell to a seasonally adjusted 44.5 in February, a three-month low, from 47.4 in January. It remained well below the 50 threshold that indicates activity growth.
Brazilian manufacturers shed jobs at the second-fastest pace since April 2009 as input costs rose, forcing companies to lower output for the 13th straight month, Markit said.
“Those still in work are struggling to make ends meet, with inflation soaring further,” said Markit economist Pollyana de Lima. “The latest PMI data showed the strongest rise in costs since the global financial crisis.”
Brazil’s economy is headed to its worst recession in more than a century, and will return to its pre-crisis size only in 2019, according to a Reuters poll.
Latin America’s largest economy has nosedived after a ballooning budget deficit and high inflation prompted President Dilma Rousseff and the central bank to raise taxes, cut spending and jack up interest rates last year. Brazil’s inflation BRCPIY=ECI remains one of the highest among major world economies, hovering around 12-year highs above 10 percent a year.
