(Fixed first paragraph to “April” instead of “March”)
BRASILIA, May 3 (Reuters) – Brazil’s manufacturing sector growth slowed in April to its slowest rate since June last year, a purchasing manager activity survey showed on Monday, and prices charged to customers rose to recent historic highs.
While the brutal second wave of the COVID-19 pandemic weighed on activity as a whole, employment was up and companies were more optimistic about future conditions, according to IHS Markit’s latest purchasing managers index (PMI) report.
The PMI headline fell to 52.3 in April from 52.8 in March, the lowest since last June.
A reading above 50.0 indicates expansion, while a number below indicates contraction. The series was launched in 2006.
“Survey participants saw the light at the end of the tunnel, with many hoping that greater availability of the vaccine would help curb the spread of disease and restriction (lift). Business sentiment is improving … supporting new job creation, ”said Polyanna de Lima, director of the economic association at IHS Markit.
“Inflation has continued to surge, with goods producers raising their tariffs at the third highest level in a survey for more than 15 years of history,” he said, citing global raw material shortages.
The IHS Markit employment index rose back above the threshold of 50.0, to 51.8 from 48.5, while the index of future output rose, IHS Markit said.
The output price index, which measures the price charged to customers, rose to the third highest in the series’ history and is close to the top two readings from last year.
Consumer price inflation in Brazil is running at more than 6%, well above the central bank’s year-end target of 3.75%. The central bank is widely expected to raise interest rates next week by 75 basis points for the second time. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)