Brazil Industry

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Brazil: Industrial production records first monthly increase after three consecutive drops

July 1, 2015

In May, industrial production increased 0.6% over the previous month on a seasonally-adjusted basis, which contrasted the 1.2% decrease seen in the previous month and marked the highest reading in 10 months. The incrase was slightly larger than the 0.6% rise the market had expected and was driven by a deterioration in the production of capital and consumer goods.

In annual terms, industrial production fell 8.9% in May (April: -7.7% 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, the production of coke, oil productions and biofuels fell significantly.

Annual average growth in industrial production fell from April’s minus 4.9% to minus 5.3% in May, which marked the lowest level since December 2009. Annual average growth has followed a downward trend since March 2014.

LatinFocus Consensus Forecast participants see industrial production falling 2.8% in 2015, which is unchanged from last month's estimate. In 2016, industrial output is expected to expand 1.6%.


Author: Angela Bouzanis, Senior Economist

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Brazil Industry May 2015

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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