Companies and countries alike are eager to resume full operations in wake of the coronavirus pandemic. However, spikes in cases where reopening has already begun paint a sobering picture of the future years to come, where “normal” cannot resume until a suitable COVID-19 treatment or vaccine is found. Leeco® Trading is working closely with customers to navigate these unsure times, as well as with suppliers, who are working to prevent an outbreak in their workforce. Here is what our team is watching:

Market Metrics to Watch

Manufacturing PMI (as of May 2020)


The manufacturing purchasing managers index rose slightly in May for both Brazil and Mexico from 36.0 and 35.0, respectively. Although these PMI readings indicate contraction, the rate of contraction is softer in both countries than it was in April. Brazil and Mexico began reopening economies mid-May, so June figures are expected to soften further.

Capacity Utilization

Brazil (April 2020)
Mexico (Mar. 2020)

March capacity utilization figures in Mexico fell slightly from February’s 81.4. Brazil also saw a decline in March – from 78.7 in February to 76.0 – which continued into April. Mexico’s April capacity utilization figures will be released next week but are also expected to fall, as manufacturing activity was more restricted than in March due to the pandemic.


Below is a chart showing import levels of key Latin American countries Mexico, Brazil and Chile, as of May 2020. Imports increased for Brazil in May, but decreased in Chile. Mexico reported a decline in imports in April, but a slight increase is expected once May numbers are released.

Increasing Car Production in May 2020


After a dramatic fall in April, May saw car production increase modestly in Mexico and Brazil as manufacturing resumed in both countries. Despite this increase, Mexico is struggling to meet US automakers’ needs and Brazil is anticipating a 40% fall in new vehicle sales in 2020.

Currency Stabilization (as of 6/15)


After several months of record-low currency values, both the Mexican peso and Brazilian real saw stabilization as well as appreciation in late May, into early June. Currency appreciation in these regions is a positive sign for imports.

Executive Perspective

Antonio Rosset, Commercial Director of Leeco Trading, regularly monitors important market indicators to help customers make strategic sourcing decisions and shares what he is watching in June & July.

“In these uncertain times, every purchase matters, which is why it is so important to work with sourcing partners that you can trust and that understand your business. While we see some positive signals that the economy is recovering and manufacturing is resuming, this pandemic is far from over. Companies that can resume operations while keeping their workforce safe will be in the best position to recover and grow out of these difficult times.”

Antonio Rosset | Commercial Director, Leeco Trading

Antonio Rosset
Commercial Director

Economic News to Follow

Recent economic news points towards mixed economic and manufacturing activity across key regional markets.

China’s Economy Slowly Crawling Back, At Risk for 2nd Wave

Chinese industrial production rose in May alongside a pickup in several economic indicators, according to official data released by the country’s statistics authority on Mon. Jun. 15, 2020 – the latest sign that the world’s second-largest economy is on the road to recovery from the impacts of the coronavirus pandemic.

China has been battling the consequences of the coronavirus pandemic, but official data shows its factory activity recovered pace in May as restrictions tied to the COVID-19 outbreak were eased.

However, Beijing reported 57 new coronavirus cases on Sunday – its highest number in two months – and officials have reimposed regional lockdown measures in certain areas.

Mexico Sheds 344,500 Formal Jobs in May

Mexico’s economy shed 344,526 formal jobs in May because of the novel coronavirus pandemic, pushing the number of lost jobs in the last three months above 1 million even as the pace of layoffs slowed down. In April, the economy shed 555,247 jobs and 130,593 in March, among employees registered with the Mexican Social Security Institute (IMSS).

Mexico’s factory output continues plummet, data suggests bottom is near

Mexico’s manufacturing sector deteriorated sharply in May, following a record contraction in April, as restrictions put in place to prevent the spread of the coronavirus shuttered factories, depressed demand and dampened sentiment.

The IHS Markit Mexico Manufacturing PMI survey showed that in May output fell sharply, demand conditions softened, new orders tumbled in part due to a decline in exports and firms continued to lay off workers.

“That said, the rates of decline in key metrics such as output and new orders eased during May, suggesting that contractions are beginning to bottom out,” said Eliot Kerr, an economist at IHS Markit.

Brazil’s Trade Balance Falls in May as Currency Appreciates

In May, Brazilian exports totaled US $17.94 billion and imports, US $13.392 billion, with a positive balance of US $4.548 billion. This is down from April’s trade balance of $6.701 billion, as Brazil’s currency recovered from a spike in depreciation in March and April.

Brazil Manufacturers Seek to Skirt Shutdowns as Coronavirus Surges

Manufacturers in Brazil like Marcopolo SA and Randon are trying to show they can safely operate their factories at reduced capacity, dodging the coronavirus-induced shutdowns that have hit the mining and food processing sectors. Coronavirus outbreaks had affected their workers while running operations at full steam.

But smaller manufacturers like bus maker Marcopolo, plane maker Embraer SA and truck trailer and suspension maker Randon SA Implementos e Participacoes, are hoping a safer work environment will be a silver lining of the health crisis as they ramp up operations after their own virus-induced disruptions.