Brazil: Industrial production stalls in July
September 2, 2016
In July, industrial production increased a meagre 0.1% over the previous month in seasonally-adjusted terms, which marked a deterioration compared to the 1.3% expansion recorded in June and represented the lowest reading since February. However, the result beat expectations of a slight 0.2% contraction. Behind the slowdown were downturns in the production of capital and consumer goods, which recorded contractions.
In annual terms, industrial production fell 6.6%, which was below the 6.0% drop recorded in June. Widespread declines were recorded nearly across the board with 22 of the 26 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed recording contractions. The categories with the biggest negative impacts were the production of mining and quarrying and of coke, oil products and biofuels.
Annual average growth in industrial production improved from minus 9.8% in June to minus 9.6% in July. Brazil’s economy has sunk into the worst recession in its modern history amid low prices for key exports, high inflation, political turmoil and depressed confidence levels.