Industrial output continues to grow in October

Brazilian industry production grew 0.8% in October, compared to the previous month, driven mainly by food and pharmaceutical products, according to the Monthly Industrial Survey, released today (12/04) by IBGE.

It is the best October since 2012 (1.5%) and the third consecutive high for the sector, which accumulated during this period an expansion of 2.4%, something that has not happened since the end of 2017. Three of the four major economic categories and 14 of the 26 surveyed branches advanced in October.

Year-to-date, however, the industrial sector decreased by 1.1%. Compared to the same month of the previous year, there was a 1% increase in October, the second after three months of consecutive negative results: June (-5.8%), July (-2.6%), and August (-2 ,1%). In the accumulated of 12 months, industrial production fell by 1.3%, continuing to reduce the intensity of loss that began in August.

“When we look at the last three months, we see an improvement in the industry’s trajectory, although not all of it. This growth has been influenced by domestic demand and a slight improvement in the labor market, accompanied by mass income, lending, FGTS release, and below-target inflation. This improvement is far from recovering past losses, but shows a change in the industrial sector, which until mid-year was negative,” says André Macedo, the research’s manager.

Among the activities, the most important positive influences on October’s growth were registered by food products (3.4%), mainly sugar and orange juice, and pharmaceutical chemicals products (11.2%). Pharmaceutical chemicals reversed the drop observed in the previous month (-0.3%); and pharmaceutical products eliminated the cumulative 9.1% reduction in August and September this year.

Macedo points out that there were also significant positive impacts in the electrical machinery, equipment, and materials (4.9%), pulp, paper, and paper products (2.4%), printing and recording playback equipment (15.3%), machinery and equipment (1.4%), other chemicals (1.1%), non-metallic mineral products (1.8%), and beverages (1.6%).

On the other hand, the research manager notes that among the ten branches that reduced production this month, the most important performances were verified in coke, petroleum products, and biofuels (-2.1%), which intensified the decrease observed in the previous month (-1.3%); in metallurgy (-3.2%), with loss of 7.1% in five consecutive months of decrease in production; and in the extractive industries (-1.1%), which marked the second consecutive negative rate, with a cumulative loss of 2.9% in this period.

“These three segments have a strong impact in the context of the industrial sector, but the largest one comes from petroleum products. In metallurgy, the sequence of falls occurred mainly in steel products,” commented André Macedo. Other declines were registered in apparel and accessories (-3.4%), furniture (-5.6%), and motor vehicles, trailers, and body segments (-0.6%).

Among the major economic categories analyzed by the Monthly Industrial Survey, the best results were registered in durable consumer goods (1.3%) and semi and non-durable consumer goods (1.0%). The intermediate goods segment (0.3%) also showed progress this month. The capital goods sector was the only one that reported a negative rate in October (-0.3%).

Source: Agência IBGE de Notícias

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