The S&P Global Composite PMI for Brazil rose to 51.2 in February 2025, indicating moderate expansion in private sector activity after a contraction. Manufacturing output drove growth, while services saw a slight recovery hampered by weak purchasing power. Cost inflation accelerated, leading to increased selling prices as firms passed costs to consumers.
In February 2025, Brazil’s private sector activity experienced a notable recovery, as indicated by the S&P Global Composite PMI, which rose to 51.2 from a low of 48.2 in January. This marks a shift from a contraction observed over the previous 16 months, suggesting a moderate expansion in overall economic activity.
The increase in private sector output was primarily driven by gains in the manufacturing sector, which showed stronger performance compared to services. While manufacturing output expanded significantly, the services sector only observed a marginal uptick. The resurgence in new business, particularly among goods producers, aided growth, but service sectors continued to experience difficulties due to weak consumer purchasing power and elevated borrowing costs.
Moreover, there was a notable acceleration in cost inflation, particularly within the services sector, which faced the highest pressures recorded in 18 years. Consequently, firms increased selling prices to their highest levels since mid-2022 as they sought to pass these increased costs onto consumers, indicating broader inflationary pressures in the economy.
The rebound in Brazil’s private sector activity, as evidenced by the rise in the S&P Global Composite PMI, signals a positive shift following a period of contraction. Increased manufacturing output and a slight recovery in services indicate potential stabilization in the economy, although challenges remain due to inflationary pressures and consumer purchasing limitations. The ongoing cost inflation and rising selling prices emphasize the need for effective economic management going forward.
Original Source: www.tradingview.com
