Brazil: Industrial output logs best reading in two years in June
August 4, 2020
Industrial output expanded 8.9% month-on-month in seasonally-adjusted terms in June, which was above May's 8.2% increase. The print marked the best result since June 2018 and beat market expectations of a 7.7% rise.
Looking at the details of the release, consumer goods production picked up pace in June, while intermediate goods production weakened over the previous month. Meanwhile, durable consumer goods production as well as non-durable consumer goods production moderated.
On an annual basis, factory output plunged 9.0% in June, a smaller decrease than May’s 21.9% fall. Meanwhile, the trend pointed down, with the annual average variation of industrial production coming in at minus 5.7%, down from May's minus 5.4%.
Commenting on the outlook for the industrial sector, Alberto Ramos, economist at Goldman Sachs, noted:
“Going forward, we expect the industrial sector to continue on a gradual recovery path in tandem with the expected further gradual easing of social distancing protocols and measures to limit movement and activity.”
Author: Hanna Andersson, Economist