Industrial production

Industry grows 7.0% in May, after two months of decline with the pandemic

Section: Economic Statistics | Cristiane Crelier

July 02, 2020 09h00 AM | Last Updated: July 02, 2020 04h51 PM

The vehicle industry was one of the main sectors behind the growth return in May - Photo: Itamar Aguiar/Palácio Piratini

The national industrial production increased 7.0% in May 2020 compared to April. Growth, however, was not big enough to offset the 26.3% drop accumulated in March and April. So, the sector reaches the second lowest level since the beginning of the time series of the Monthly Survey of Industry, with the lowest level being registered in April this year. The data, released today (2) by the IBGE, reflect the effects of social isolation measures to control the Covid-19 pandemic.

"From the last third of March on, several industrial plants were shut down, whereas in April some stood practically the whole month off. That caused the worst result for industry in the survey's time series. The month of May give some signs of production return, bu the expansion of 7.0%, despite being the highest since June 2018 (12.9%), is due to the very low basis of comparison. Although with a positive performance, the total industrial result is still 34.1% below the record level reached in May 2011", says André Macedo, the survey manager.

In comparison with May 2019, production fell 21.9%, becoming the seventh negative result in a row and the highest since the beginning of the time series. Summing the last 12 months, the drop was of 5.4%, the highest since December 2016 (-6.4%). In 2020, the industry already accrues a decrease of 11.2% up to May. "It is worth mentioning that , till February, the retraction was there , but it was 0.6%", highlights Mr. Macedo.

Among the segments of activities, the growth against the previous month was widespread, reaching all the major economic categories and most (20) of the 26 surveyed segments. "The activities were mostly leveraged by the return (though partial) to production of the producing units, after the interruptions occurred in several of them due to the pandemic", analyzes André Macedo.

The most relevant positive influence was exerted by Motor Vehicles, trailers and semi-trailers (244.4%), which interrupted two months in a row of production decrease and made the sharpest expansion since the beginning of the tine series. Even so, it stands 72.8% below last February's result. In the comparison between May 2019 and May 2020, this activity accounted for the main negative contribution (-74,5%) to the formation of the industry average.

Other positive highlights in comparison with the previous month were the coke, petroleum products and biofuels (16.2%), which increased again after accumulating a 20.0% loss in three consecutive months of negative rates, and beverages (65.6%), which eliminated part of the 49.6% reduction accumulated in March and April 2020.