Brazil: Industrial production records largest drop in six months in March
May 3, 2019
Industrial production plunged 1.3% month-on-month in seasonally-adjusted terms in March, the largest contraction since September 2018. The result contrasted February’s revised 0.6% increase (previously reported: +0.7% mom) and notably undershot market expectations of a softer 0.7% drop. The poor result underscores the troubled Brazilian recovery, which has failed to take off hindered partly by a challenging external environment.
The contraction was driven by falls in the production of intermediate and consumer goods. Among sectors, industrial output fell in 16 of the 26 surveyed, with notable declines recorded in food products and automobile production.
On an annual basis, industrial production dropped 6.1% in March, notably contrasting February’s 2.0% increase and the worst reading in 10 months. March’s reading however suffered from a negative calendar effect as it had two less working days in it then the same month last year. Annual average growth in industrial production fell from 0.6% in February to zero growth in March.