Brazil: Industrial output falls at fastest pace in five years
February 4, 2014
In December, industrial production fell 3.5% over the previous month on a seasonally-adjusted basis. The result, which was driven primarily by a large decrease in capital goods, was well below the 0.6% contraction observed in November. The fall was also sharper than market expectations of a 1.7% decline and marked the largest contraction since December 2008. In annual terms, industrial production fell 2.3% in December (November: +0.3% year-on-year).
A decrease in output was recorded in 22 of the 27 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. Automobiles, machinery and equipment, metal products, and pharmaceuticals registered the largest contractions. Among the categories in which output increased, electronics and communication equipment tallied the most significant expansions.
Nevertheless, annual average growth in industrial production inched up slightly from 1.1% in November to 1.2% in December. In the full year 2013, industrial production increased 1.2%, which was up from the 2.5% contraction registered in 2012.
LatinFocus Consensus Forecast participants see industrial production expanding 2.6% in 2014, which is down 0.1 percentage points from last month's estimate. In 2015, industrial output is expected to rise 2.6%.
Author: Carl Kelly, Economist