The S&P Global Brazil Manufacturing PMI dropped to 47.5 in July 2026 from 50.8 in June, indicating a renewed downturn in the sector and marking the sharpest contraction since February. New orders recorded their steepest fall in more than three years, while export orders also declined sharply amid softer external demand. With both domestic and overseas sales weakening, manufacturers reduced output for a third consecutive month, cutting production at the fastest rate since February.
Employment decreased, bringing an end to a five-month period of job creation, and work backlogs continued to shrink. Input costs rose, with firms frequently citing the conflict in the Middle East as a key factor, which in turn pushed output price inflation to historically high levels. At the same time, weaker sales, abundant inventory levels, and heightened geopolitical uncertainty contributed to the steepest fall in purchasing activity since February. Despite the overall deterioration, business confidence strengthened and moved above its long-run average.
