Brazil: Industrial production records zero growth in June

In June, industrial production growth was flat over the previous month in seasonally-adjusted terms, which was a deterioration from May’s revised 1.2% increase (previously reported: +0.8% month-on-month). The result overshot market expectations of a small drop as manufacturers gradually recover from Brazil’s deep recession.

Behind the deceleration was slower growth of capital and intermediated goods. The output of consumer goods also deteriorated notably and swung to a contraction.

In annual terms, industrial production grew a moderate 0.4% after a notable 4.0% expansion in May. In addition, the trend improved notably and the annual average variation in industrial production rose to minus 1.7% from minus 2.1%.

The analysts surveyed by FocusEconomics for this month’s LatinFocus Consensus Forecast see industrial production growing 1.0% in 2017, which is unchanged from last month's estimate. In 2018, industrial output is expected to grow 2.9%.