Brazil: Industrial output records quickest growth since August 2020 in December
Industrial output increased 2.8% in month-on-month seasonally-adjusted terms in December, which was a marked improvement from November’s flat reading and marked the best result since August 2020. The reading reflected a broad-based upturn, with activity in the intermediate goods, consumer goods and capital goods sub-sectors all improving in December. Lastly, durable consumer goods production rose at a stronger rate, while non-durable consumer goods production grew.
On an annual basis, factory output fell at a sharper rate of 5.0% in December (November: -4.4% yoy). As such, industrial production grew 3.9% in 2021 as a whole, rebounding sharply from 2020’s 4.5% contraction and clocking the highest annual average result since 2010.
Regarding the outlook, Alberto Ramos, economist at Goldman Sachs, commented:
“Going forward, the industrial sector is expected to face headwinds from tighter financial conditions (rising rates), weak demand as inflation erodes real disposable income, lingering supply chain frictions, and high logistical, energy and other input costs. The surge of Omicron cases in January, the decline of both consumer and business sentiment indicators, and the decline of the January Markit Manufacturing PMI […] point to some deceleration of industrial activity at the start of the year.”