Economic and manufacturing indicators are softening in key Latin American countries as surging inflation, supply chain constraints, COVID variant concerns and lower demand restrict growth in the region. However, imports are on the rise, suggesting that many manufacturers are considering international sourcing to control production costs.

The Leeco Trading team is ready to help businesses in the region strategically import the raw materials they need using its strong network of material producers. Contact us today to receive a quote.

Market Metrics to Watch

Manufacturing PMI

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Brazil
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Mexico

Brazil’s manufacturing PMI fell month-over-month during October 2021, marking the slowest pace of expansion in 17 months as new orders contracted. Mexico’s manufacturing PMI increased month-over-month during October 2021 but remains at a rate of contraction.

Capacity Utilization

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Brazil
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Mexico

Capacity utilization decreased month-over-month during September 2021 in both Brazil and Mexico as manufacturing output slowed.

Imports

Below is a chart showing October import levels for Mexico, Brazil and Chile. Imports to each of these countries increased month-over-month.

Rising Inflation

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Brazil
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Mexico

The annual inflation rate increased to 10.67% in Brazil during October 2021 as economic reopening, weaker currency, supply chain issues and severe droughts weighed on prices. Mexico’s annual inflation rate increased to 6.24% in October 2021 as costs surged for transportation and restaurants and hotels.

Currency Uncertainty

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Brazil
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Mexico

Currency values in Brazil and Mexico are volatile amid high inflation, a strengthening US dollar and concerns about the Omicron variant. The Brazil real traded around a four-week low of 5.68 in early December, while the Mexican peso slightly strengthened after hitting a 14-month low the previous month. Currency values are as of 12/1/2021.