Brazil: Industrial production plummets in July
September 2, 2015
In July, industrial production contracted a notable 1.5% over the previous month on a seasonally-adjusted basis, which was a deterioration from the revised 0.9% decrease seen in June (previously reported: -0.3% month-on-month). July’s result marked the lowest reading in 7 months and was notably worse than the 0.1% decline expected by market analysts. The fall was driven by a deterioration in the production of intermediate and consumer goods.
In annual terms, industrial production plummeted 8.9% in July, a drastic worsening from June’s revised 2.8% contraction (previously reported: -3.2% year-on-year). A decrease in output was recorded in 23 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. In addition, food production fell significantly.
As a result, annual average growth in industrial production fell from June’s minus 4.9% to minus 5.4% in July, which marked the lowest level since December 2009. Annual average growth has followed a broadly downward trend since March 2014.