SAO PAULO – Brazilian manufacturing activity expanded for a sixth straight month in September as strong demand at home and abroad drove firms to ramp up output at the fastest pace since May, a private survey showed on Monday.

The Purchasing Managers’ Index BRPMIM=ECI compiled by research firm Markit held at a seasonally adjusted 50.9, the same as August’s level. Readings above the 50 threshold indicate improving business conditions for manufacturers.

The report is the latest in a string of solid data highlighting growing momentum in Latin America’s largest economy as it exits its deepest recession in more than a century, reinforcing the outlook for a gradual recovery.

“Momentum in the Brazilian manufacturing sector was maintained at the end of the third quarter,” Markit economist Pollyanna De Lima said.

“Less encouraging were signs that manufacturers remain unwilling to hold inventories, suggesting that they’re not yet convinced of a sustained rise in underlying demand.”

Costs rose by the most in six months, driven mostly by an increase in fuel prices. Still, firms did not fully pass through that increase to consumers in a bid to remain competitive and attract further demand. – Reuters