Brazil Industry

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Brazil: Industrial production rises at the fastest pace in six months

September 3, 2014

In July, industrial production rose 0.7% over the previous month on a seasonally-adjusted basis, which contrasted the 1.4% contraction tallied in June and represented the largest gain in six months. Capital goods expanded 16.7% in July, which markedly exceeded the 9.7% contraction seen in June. In addition, consumer goods rebounded from a 4.9% contraction in June to a 7.1% expansion in July. In contrast, intermediate goods decreased 0.3% which was a sharper fall than June’s 0.1% contraction. In annual terms, industrial production fell 3.5% in July, which was softer than June’s 7.1% decrease.

An increase in output was recorded in 20 of the 24 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. The biggest gains were recorded in the production of automobiles as well as computer equipment, electronic and optic products. Among the categories in which output decreased, food products registered the largest contraction.

In contrast with the rise in annual figures, annual average growth in industrial production deteriorated from minus 0.6% in June to minus 1.2% in July, marking the lowest level since January of last year.

LatinFocus Consensus Forecast participants see industrial production contracting 0.9% in 2014, which is down 0.8 percentage points from last month's estimate. In 2015, industrial output is expected to expand 1.4%.


Author: Angela Bouzanis, Senior Economist

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Brazil Industry July 2014

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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