Brazil's input costs rise in May at fastest pace in 21 months: Report

By Ovunc Kutlu

ISTANBUL (AA) - Brazil's input costs in May increased at fastest rate for the last 21 months, according to a report by S&P Global on Monday.

"Business closures and demand retrenchment curbed sales growth and dampened production," said the global data provider.

"Meanwhile, there was a mild weakening of business confidence amid firms' concerns surrounding the detrimental impact of the flood crisis on the economy, input distribution, customer orders and the fiscal budget," it added.

The South American country's Manufacturing Purchasing Managers’ Index (PMI) decreased 3.8 points to 52.1 in May, from 55.9 in April.

A reading above 50 indicates expansion and below 50 shows contraction.

Despite the decline, S&P Global said the health of Brazil's manufacturing industry improved in May for the fifth consecutive month.

"With the floods wrecking homes, shops, farms, airports, roads, bridges and more, manufacturers struggled to receive purchased inputs and were concerned about its impact on the wider economy, customer orders and the fiscal budget," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

The floods caused by heavy rains in the southern state of Rio Grande do Sul have resulted in loss of life and property last month.