Brazil Industry

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Brazil: Industrial production drops for third consecutive month in May

July 2, 2014

In May, industrial production fell 0.6% over the previous month on a seasonally-adjusted basis, which was a slightly stronger contraction than the revised 0.5% decrease tallied in April (previously reported: -0.3% month-on-month). Capital goods contracted 2.6% in May, which was down from the 0.5% contraction seen in April. The contraction in intermediate goods accelerated and fell 0.9% in May, which was faster than the 0.2% decrease tallied in April. Consumer goods, on the contrary, contracted at a slower pace in May. In annual terms, industrial production fell 3.1% in May (April: -5.9% year-on-year).

A decrease in output was recorded in 15 of the 24 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. Oil derivate products and biofuels registered the largest contractions. Among the categories in which output increased, extractive industries tallied the most significant expansion.

Following the sharp drop in annual figures, annual average growth in industrial production deteriorated from 0.7% in April to 0.2% in May, marking the lowest level since March of last year.

LatinFocus Consensus Forecast participants see industrial production expanding 1.6% in 2014, which is unchanged from last month's estimate. In 2015, industrial output is expected to rise 2.1%.


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Brazil Industry May 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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