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The latest evidence of a regional slowdown came Wednesday, when Brazil said its economy grew just 1.9% in the first quarter compared with the year-earlier period, far below estimates for 2.4% growth. Compared with the previous three months, Brazil's GDP grew a modest 0.6%. Other countries in the region are also slowing after expanding at strong rates in the past few years. They did so by attracting large investments from companies seeking higher growth rates while developed economies in the U.S. and Europe stagnated and by selling to Brazil. Chinese imports from Brazil, for instance, reached $44 billion in 2011, from just over $1 billion in 2000, before falling last year. China, a leading buyer of exports from the region, has slowed more than expected, and economists say the country's double-digit growth is over.

Carlos Rodolfo Schneider, vice president of Brazil-based Ciser Parafusos & Porcas, Latin America's biggest producer of screws and nuts, said his exports have fallen to 5% of total sales from 20% a few years ago. "Profits are very tight" and sales will rise only slightly this year, Mr. Schneider said. "Asian products are coming in at low prices and we need to adapt our prices here to international levels," he said.

Most of South America's exports are still tied to commodities and countries aren't able to quickly pivot to manufacturing, said José Francisco de Lima Gonçalves, chief economist at Fator brokerage in São Paulo. "There's a lot of competition among the guys that sell to China," he said. Commodities producers "have to maintain their excess capacity to guarantee their presence in the market. That's the problem of having one big client."