* HSBC Manufacturing PMI rises to 50.2 from 49.8 in Sept
* Factories report best month since March
* New orders rise, but survey points to job losses
By Silvio Cascione
SAO PAULO, Nov 1 Brazil's manufacturing sector
expanded in October for the first time since March, a private
survey showed on Thursday, suggesting a modest turnaround in
local industry after a weak performance in September.
The HSBC Purchasing Managers' Index for the Brazilian
manufacturing sector rose to 50.2 in October from
49.8 in September. It was the first time since March the index
rose above the 50 mark that divides expansion from contraction.
Government data earlier on Thursday showed industrial
production slipped 1.0 percent from the previous
month after an increase of 1.5 percent in August.
The government's industrial production statistics include
the manufacturing, mining and oil sectors. Nevertheless, the
slim rise in the PMI index for October's fueled hopes that
factories kicked off the last quarter on a stronger footing.
"The October manufacturing PMI report provides further
evidence that the rebound is gaining traction, even if the
overall pace of growth remains modest," said Andre Loes, chief
economist in Brazil at HSBC.
New orders also rose for the first time since March but
export orders dropped for the 19th month in a row, due mostly to
weak demand from European clients in particular.
According to the survey, nearly 17 percent of the firms
noted a rise in new orders, while 13 percent noted a drop.
Feeble global demand has been one of the main drags on
Brazil's manufacturing sector in the past few years.
Manufacturers also reduced their stocks of finished goods
for the 14th consecutive month, even though by a small margin.
Job losses were reported for the seventh month in a row, but
only around 5 percent of companies reduced their staffing
levels, said Markit, who conducted the PMI survey for HSBC.
Input prices rose in October, the survey added, as companies
reported unfavorable exchange rates and higher petrochemical
prices. Some businesses also linked rising purchase costs to a
recent drought in the United States.
The survey also highlighted Brazil's inadequate highway
conditions, which helped lengthen suppliers' delivery times for
the tenth month in a row. A few companies also complained about
delays in the delivery of imported goods, Markit added.