Brazil: Industrial production improves in December, yet records largest contraction in over a decade in 2015
January 12, 2016
In December, industrial production contracted 0.7% over the previous month on a seasonally-adjusted basis, which was a less pronounced contraction than the revised 2.3% decrease (previously reported: -2.4% month-on-month) seen in November. November’s reading marked the largest drop since December 2013. However, December’s fall was worse than market analysts’ expectations of a flat reading. The improvement was driven by gains in intermediate and consumer goods, which swung to expansion in December.
In annual terms, industrial production plunged 11.9% in December, which was a slight improvement from November’s 12.4% fall. A decrease in output was recorded in 24 of the 26 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. The biggest negative impact was recorded in the production of motor vehicles and trailers.
For the full year 2015, industrial production dropped 8.3%, which marked the worst result since the modern series began in 2003 (2014: -3.1%). Brazil’s economy has sunk into the worst recession in its modern history amid low prices for key exports, high inflation, political turmoil and depressed confidence levels.