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National industry

Output of industry is 18.8% down during pandemic in April and records worst performance in 18 years

Section: Economic Statistics | Alerrandre Barros

June 03, 2020 09h00 AM | Last Updated: June 03, 2020 11h51 AM

Interruption of activities led to the worst result of industry since January 2002 - Photo: São Paulo State Government

The output of industry fell 18.8% in April, against the previous month, and reflects the effects of social isolation period initiated in March, as a control measure against the Covid-19 pandemic. That is the most significant decrease since the start of the time series, in 2002, and the second negative result in a row, with a cumulative decrease of 26.1% in the period.

The data are found in the Monthly Survey of Industry, released today by the IBGE. In the year, from January to April, the sector shrank 8.2%, and in the last 12 months, 2.9%. Against April last year, the decrease of industry was bigger, -27.2%, the sixth negative result in this comparison and the highest since the beginning of the time series registered by the Institute. 

“The April result is clearly a consequence of the bigger number of interruptions in several production plants, of different industrial segments, due to the pandemic. A negative result had been recorded in March. Now, in April, there is a widespread drop, with historically low, two-digit figures in all the economic categories and in 22 of the  26 activities surveyed”, says André Macedo, manager of the survey. 

Among the activities, the biggest decrease was that of motor vehicles, trailers and bodies (-88.5%), which was affected by the interruption in the production of cars, trucks and car pieces in several plants all over the country. As a result, the activity recorded a bigger drop than in the previous month (-28%) and  registered the most significant decrease since the start of the series. 

According to Mr. Macedo, the suspension of motor vehicle production has an impact on other industrial segments, which also recorded decreases in April: basic metals (-28.8%), rubber and plastic products (-25.8%) and machinery and equipment (-30.8%). Other decreases came from the of coke, petroleum products and biofuels (-18.4%) and beverages (-37.6%).

Food and pharmaceutical industries have a hike against March figures 

Mr. Macedo observes that the activities that deal with the production of essential goods recorded an advance in April. That is the case of food products (3.3%) and pharmaceuticals (6.6%), which rose once more after recording a decrease in March (-1.0% and -11%).Toiletries , soaps and cleaning products and personal hygiene products also rose (1.3%), whereas the mining and quarrying sector remained stable (0%).

“Although the positive impact of the food sector was mainly due to the increased output of sugar, other essential items for families also recorded increases, for example, powdered milk, pasta, meat and rice", Mr. Macedo adds. 

Record decreases observed in all the major categories 

André Macedo highlights that the decrease in all the major economic categories reached its worst level in the time series.  Durable consumer goods recorded the most significant decrease in April (-79.6%), due, to a great extent, to the smaller production of cars. There was decrease for the third month in a row, with a cumulative loss of 84.4% in the period. 

The segment of capital goods (-41.5%) also recorded a bigger decrease against the national average (-18.8%). The sectors producing intermediate goods (-14.8%) and semi and non-durable goods (-12.4%) also fell, with the former intensifying the decrease of March (-3.7%), and the second keeping the negative result registered since November last year, with a cumulative drop of 25.2% in the period. 

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