National industry

Industry grows 8.9% in June, led by rise in vehicle production

Section: Economic Statistics | Alerrandre Barros

August 04, 2020 09h00 AM | Last Updated: August 04, 2020 01h44 PM

Vehicle production leads positive result of industry in June - Photo: Wikimedia

The output of industry in Brazil grew 8.9% in June, against May (8.2%), according to the Monthly Survey of Industry (PIM), released today (4) by the IBGE. That was the second rise in a row, still not enough to make up for the 26;6% cumulative loss recorded in the months of March and April, after the implementation of social isolation measures to control the Covid-19 pandemic.

“Despite the relevant increase, 17.9% in May and June, the output of industry is still far from counterbalancing the losses concentrated in March and April. The negative balance of this four-month period is quite significant (-13.5%)”, says André Macedo, manager of the survey.

Output is below the level in 2019. Against June last year, the sector contracted by 9.0%. Industry registered a record negative figure at the end of Q2 this year (-19.4%). The cumulative index in the first half of the year fell 10.9%, and, in the year, 5.6%, the biggest decrease since December 2016 (-6.4%).  

In June, there was widespread advance in all the major economic categories and in 24 of the 26 subsectors surveyed. The rise in June, 8.9% was the biggest since June 2018 (12.9%), when the sector resumed production right after the truck driver's strike. In spite of the positive performance in June this year, industry is still 27.7% below the level reached in May 2011.

Regarding the activities, André Macedo calls attention to the once more positive influence of motor vehicles, trailers and bodies, with an increase of 70.0% in June, mainly due to cars and trucks. “The sector had cumulative expansion of 495.2% in two consecutive months of increase in output, but it is still 53.7% below the level of February”, Mr. Macedo highlights.

Another positive result came from other transportation equipment, which increased 141.9%. “Motorcycles belong to that activity which has recorded significant increases since May (57%). The advances, however, are far from making up for losses in March and April.

Food and petroleum products record a decrease of 1.8%

The industries of food products and coke, petroleum products and biofuels decreased 1.8% in June. “The food industry dynamics is different from that of the industry sector, due to its characteristics related to supply. It had been registering positive results, opposite to the industry overall, which faced decrease. Increases in the previous months, combined with a crop in sugar, led to a falling result in June. Food products, however, have a positive balance, differently from the average of industry.”

Coke, petroleum products and biofuels recorded decreases after a rise of 16.3% in May, when the activity interrupted a series of three consecutive months of decrease in output, resulting in a cumulative loss of 20.1%. “A decrease of that activity in June was not surprising, after the bigger advance observed in May,” André Macedo explains.

Major categories record increases for second month in a row

Among the major economic categories, durable consumer goods (82.2%) and capital goods (13.1%) registered more significant positive rates in June than in May and had output increase for the second in a row, with cumulative results of 287.4% and 47.3%, in the period, respectively.  Despite the positive results, these segments are still quite below the February level (-40.1% and -27.1%).

The sectors that produce semi-durable and non-durable consumer goods (6.4%) and intermediate goods (4.9%) also recording positive rates in June, and both advancing below the average of industry (8.9%), but with increases in output for the second month, of 17.7% and 10.7%.