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National industry

Pandemic makes industrial output drop 9.1%, the worst figure in March since 2002

Section: Economic Statistics | Carmen Nery

May 05, 2020 09h00 AM | Last Updated: May 06, 2020 12h46 PM

A drop of 28% in the vehicle output created the biggest negative impact in the Industry in March – Photo: Wikimedia

The industrial output dropped 9.1% in March, against February, the worst result for March since 2002. In relation to the same period in 2019, the fall was less intense, of 3.8%, though it was the fifth negative result in a row in this comparison. Consequently, the industrial sector accumulates -1.7% in the year and -1% in 12 months, according to the Monthly Industrial Survey (PIM), released today (5) by the IBGE.

The survey manager, André Macedo, explains that this result was affected by the shutdown in several industries, due, especially, to the social isolation required to suppress the Covid-19.

“The pandemic impact is more evident when compared with February, as the rate is strongly negative and represents the most intense drop since May 2018, when the truck drivers’ strike happened. And not only because of the magnitude of the rate, but also because of the expansion of several activities, including all four economic activities and 23 of the 26 activities surveyed”, analyzes Macedo.

The reduction of 9.1% reported from February to March was also the most significant figure since May 2018 (-11%) and led the output level to return to a level similar to the one reported in August 2003.

“The activity that had the most important negative impact was motor vehicles, trailers and bodies (-28%). The main affected product, in terms of negative behavior, was cars, but the trucks sector also reported losses, as well as the car pieces sector. Many enterprises stopped their output process due to the quarantine period, either by giving collective vacations or stopping the activities for a certain period”, adds Macedo.

It should be considered that the quarantine period did not reach the whole March and varied according with the Federation Unit. Macedo explains that the social isolation also affected the sectors differently. The food sector showed a less intense drop than the one seen in the motor vehicles sector.

“It is a sector that is important to keep the household consumption. And there are even activities with positive behavior, such as toiletries, cleaning and personal care products, which are also households’ basic needs. However, what is seen in the industrial sector is a relevant negative behavior and, more than that, a dissemination of the negative results in several activities”, summarizes Macedo.

In comparison with the same month of the previous year, the industrial output decreased for the fifth consecutive month and reported the highest negative rate of this series. It is worth to mention that even with the positive calendar-effect, since March 2020 (22 days) had three more business days than the same month of the previous year (19 days), there is a predominance of negative rates.

As a result, not only the industry total, but also the four major economic categories, in the cumulative index for the period of January to March 2020, registered negative rates.


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