US ISM manufacturing PMI
The manufacturing activity contracted for the fourth consecutive month in the US. The manufacturing PMI (purchasing managers’ index) released at 48.2 for January. It was higher than 48.0 in the previous month, as published by the Institute for Supply Management. A sharp fall in crude prices was the main driver. The oil and gas industry saw business deteriorate in January. However, the electronics and electrical equipment business grew. There was a contraction in employment because prices fell. There was also a fall in producer inventories.
Canadian manufacturing PMI contracted
The manufacturing PMI in Canada contracted. It was 49.3 in January. However, it was above the reading of 47.5 in December. December’s reading was a record low for the index. Strong export growth across Canada combined with increased demand across the US helped offset weak domestic demand and lower output. New businesses and lower employment figures also contributed to the weak manufacturing PMI for January. The weak Canadian dollar, maintained by the Bank of Canada, increased the export margins and spurred the economy. The PMI contracted for the sixth consecutive month.
Brazilian manufacturing sector contracted
The Brazilian manufacturing sector contracted in January even though the manufacturing PMI figures for January released at their highest level since February 2015 at 47.4. The index rose after hitting a 6.5-year low in November. The new orders and output fell at a slower rate in January. The decline in commodity prices following a sharp slowdown in the global demand and a slowdown in China hit the Brazilian manufacturing sector hard. High inflationary pressures still trouble the Brazilian economy. It’s looking for some respite considering new export orders.