Industrial production changes by 0.3% in May and records fourth increase in a row
July 05, 2022 09h00 AM | Last Updated: July 05, 2022 11h58 PM
Industrial production recorded a positive change of 0.3% from April to May, fourth positive result in a row - February (0.7%), March (0.6%), April (0.2%) – with a cumulative result of 1.8% in this period. But that was not enough to make up for the decrease of 1.9% registered last January and balance is still negative in 2022 (0.1%). The data come from the Monthly Survey of Industry - PIM, released today (5) by the IBGE. Industry presents a cumulative decrease of 2.6% in the year and of 1.9% in 12 months.
This month’s result is predominantly positive, since 3 of the 4 major economic categories and 19 of the 26 industrial activities surveyd recorded increases in output.
With these results, the industrial sector is still 1.1% below the record level of the pre-pandemic period (February 2020) and 17.6% below the record level of May 2011. There has been general improvement in the performance of industry in the last four months and that can be related to income increment measures adopted by the government (permission for withdrawal of FGTS resources and early pay of the 13th salary for retired persons and pensioners). That may be having a positive impact on the industrial sector, besides the evolution in the labor market with the reduction of unemployment rate. These factors should be considered when we try to understand the positive behavior of industry right now,” says André Macedo, manager of the survey.
But he highlights that, in the general analysis, industry is still affected by factors observed monthly and that hinder the recovery of losses from the past, such as inflation at higher levels reducing the income of families, high interest rates that make credit more expensive and the labor market that still keeps the characteristic of a wage bill that does not show increase.
“The industrial sector still has room for recovery in comparison with higher levels in the time series. The restriction of access of companies to inputs and components for the production of final goods and the more expensive production costs still remain. Many industrial plants are still promoting interruptions, reduction of work shifts and granting collective vacation periods, as it is the case of the car industry in the last few months,” Mr. Macedo says.
Among the activities, the main positive contributions came from machinery and equipment (7.5%) and motor vehicles, trailers and bodies (3.7%), both if which increased once more after showing decline in the previous month: -3.1% and -4.6%, respectively.
“These two activities had recorded decreases in previous months. In the sector of machinery and equipment there was a positive behavior in machines for industry, agriculture and construction. Considering the activity of motor vehicles. the highlights were positive impacts on cars, trucks and car pieces,” says the manager of PIM.
Other relative positive contributions to the industry overall were those of food products (1.3%), leather, travel articles and footwear (9.4%), electrical machinery and apparatus (5.5%), other transportation equipment (10.3%), miscellaneous manufacturing (9.0%), maintenance, repair and installation of machinery and equipment (7.5%) and computer equipment, optical and electronic products (3.6%).
On the other hand, considering the seven activities with decrease in output, mining and quarrying industry (-5.6%) and other chemicals (-8.0%) accounted for the main impacts in May 2022, with both of them making up for the cumulative increase of February-April 2022: 6.4% and 12.0%, respectively. “The two activities came from a higher basis for comparison, after three months of positive results in a row. In May, the three main items of the mining and quarrying sector - petroleum, gas and ore - recorded decreases,” Mr. Macedo adds.
Among the major economic categories, also against April 2022, capital goods (7.4%) and durable consumer goods (3.0%) recorded the highest positive rates in May 2022, both of which increased again after recording -6.8% and -5.3%, in April, respectively. The sector of semi and non-durable consumer goods (0.8%) also increased, but at a lower rate than in the previous month (2.3%).
On the other hand, the segment of semi and non-durable consumer goods (-1.3%) accounted for the only negative rate in May 2022, interrupting three consecutive months of output increase, a period marked by a cumulative rise of 3.8%.
Production increased 0.5% against May 2021
Compared with the same month in 2021, the industrial sector grew 0.5%, with positive figures in two of the four major economic categories, 12 of the 26 sectors, 34 of the 79 groups and 47.2% of the 805 products surveyed. It is worth mentioning that May 2022 (22 days) had one business day more than the same month in the previous year (21).
Among the major economic categories, also in comparison with the same month a year ago, capital goods (5.7%) and semi and non-durable goods (2.2%) recorded, in May 2022, positive rates. On the other hand, producers of durable consumer goods (-2.1%) and intermediate goods (-0.9%) recorded decreases in the month.
More about the survey
PIM Brazil has been producing short-term indicators since the 1970s regarding the behavior of the real product of mining and quarrying and manufacturing industries. From May 2014, the release of a new series of monthly industrial production indices began, after a reformulation to: update the sample of activities, products and respondents; prepare a new weighting structure for the indices based on the most recent industrial statistics, in order to harmonize with the needs of the implementation the National Accounts Series - reference 2010; and to adopt the new classification of activities and products used by other industry surveys from 2007 onwards, namely: the National Classification of Economic Activities - CNAE 2.0 and the List of Industrial Products - PRODLIST-Industry.
The survey results can also be consulted at the Sidra database.