Brazil's factory activity remained in contraction at the end of the final quarter amid a sustained fall in new orders and surging cost pressures, survey data from S&P Global showed on Tuesday.
The purchasing managers' index, or PMI, for the manufacturing sector dropped to 48.4 in December from 49.4 in November. Any reading below 50 suggests a contraction in the sector.
New orders fell at the fastest pace in six months in December due to diminishing demand conditions.
Foreign orders also declined further, owing to economic problems in neighbouring countries, subdued global demand, and challenges to pricing competitively in external markets.
As a result of fewer order intakes, firms continued to reduce their production volumes in December, though marginally.
On the price front, cost pressures intensified in December, and the rate of inflation was the strongest in ten months due to higher costs for agricultural commodities. Meanwhile, selling prices dropped further.
"A sliver of reassurance in the latest PMI results was the rise in business confidence, as more companies expected better times ahead in 2024, and the subsequent uptick in job creation," Pollyanna De Lima, economics associate director at S&P Global, said.
