Brazil: Industrial production moderates in March
May 3, 2011
In March, industrial production rose a seasonally adjusted 0.5% over the previous month, following on a 2.0% expansion in February. The reading overshot market expectations of a 0.2% increase, but came in below the stellar 3.4% expansion tallied in March 2010. The March reading this year was dragged down by Carnival holidays, which took place one month later than usual and thus resulted in fewer working days than in March 2010. As a result, industrial output contracted 2.1% over the same month the year before. However, owing to the resilient performance observed during the first quarter of the year, the index of industrial production surpassed the post-crisis peak observed in March last year, suggesting a strong contribution from the industrial sector to Q1 GDP growth. The expansion was widespread within the main used-based components, with capital goods production leading the way, expanding a strong 3.4% over the previous month, followed by a 4.1% increase in durable goods output. The trend continued to indicate a less exuberant expansion this year, with annual average growth in industrial production decreasing from 8.7% in February to 6.8% in March.