Brazil’s Private Sector Activity Sees Notable Recovery in February 2025

In February 2025, Brazil’s private sector activity increased, with the S&P Global Composite PMI rising to 51.2 from 48.2. This marks a recovery from a 16-month contraction, largely led by manufacturing, despite services facing growth challenges. Cost inflation accelerated significantly, leading to higher selling prices for consumers.

In February 2025, Brazil’s private sector activity experienced notable improvement, with the S&P Global Composite PMI increasing to 51.2 from January’s 48.2. This shift indicates a moderate expansion after a 16-month period of contraction. The uptick in activity was driven primarily by the manufacturing sector, which outperformed services, although service output did show a slight recovery.

The resurgence of new business was chiefly attributed to goods producers, while the services sector struggled due to ongoing challenges such as diminished purchasing power and elevated borrowing costs. This continued constraint on services growth illustrates the broader economic difficulties impacting consumers and businesses.

Moreover, firms reported rising cost pressures, with inflation rates accelerating significantly. Notably, service sectors experienced the most severe cost inflation in 18 years, compelling businesses to increase their selling prices to offset these growing expenses. This surge in selling price inflation marked the highest levels observed since mid-2022, indicating a trend of escalating costs being transferred to consumers.

The rise in Brazil’s private sector activity in February 2025 signifies a positive turn following a prolonged contraction. While manufacturing led the resurgence, the services sector continues to grapple with obstacles such as high costs and financial constraints. The acceleration of cost and price inflation presents challenges that could influence future economic conditions.

Original Source: www.tradingview.com