Brazil Industry

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Brazil: Industrial production drops at the fastest pace in six months

August 5, 2014

In June, industrial production fell 1.4% over the previous month on a seasonally-adjusted basis, which was a stronger contraction than the revised 0.8% decrease tallied in May (previously reported: -0.6% month-on-month). Capital goods contracted 9.7% in June, which was down from the 2.6% contraction seen in May. The contraction in intermediate goods was less strong in June, it eased from the 0.9% decrease tallied in May to a 0.1% drop in June. Consumer goods decreased 4.9% in June, which was faster than the 0.3% drop seen in May, mainly driven by a sharp fall in the production of durable goods. In annual terms, industrial production fell 6.9% in June (May: -3.3% year-on-year).

A decrease in output was recorded in 18 of the 24 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. Production of automobiles as well as computer equipment, electronic and optic products all were down compared to the previous month. Among the categories in which output increased, oil derived products registered the strongest expansion.

Following the sharp drop in annual figures, annual average growth in industrial production deteriorated from plus 0.2% in May to minus 0.6% in June, marking the lowest level since March of last year.

LatinFocus Consensus Forecast participants see industrial production expanding 0.4% in 2014, which is down 0.3 percentage points from last month's estimate. In 2015, industrial output is expected to rise 1.5%.


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Brazil Industry June 2014

Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %.
Source: Brazil Institute of Geography and Statistics (IBGE) and FocusEconomics calculations.


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