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PIM Regional

Industrial production falls in 7 of 15 surveyed locations in August

Section: Economic Statistics | Vinícius Britto

October 11, 2022 09h00 AM | Last Updated: October 13, 2022 07h55 PM

Iron ore mining industry was the main negative influence in Pará - Photo: Leandro Grandi/Agência Vale

Industrial production fell in 7 of the 15 places investigated by the Regional Monthly Industrial Survey (PIM) from July to August, when the national index retreated 0.6%. The survey, released today (Oct 11) by the IBGE, shows drops in Pará (-6.2%), Santa Catarina (-4.8%), Espírito Santo (-3.9%), Bahia (-2.8% ), Minas Gerais (-1.9%), Paraná (-1.5%) and Ceará (-0.8%), all with results below the national average.

“Some economic factors that explain this drop are, from the supply perspective, the rising cost of raw materials and the shortage of supplies in some sectors, which directly influence the production chain. From the demand perspective, we have the increase in interest rates, making credit more expensive and reducing investments in the domestic industry, high inflation, which, although decelerating, is still at a high level, reducing the purchasing power of families ”, exemplifies Bernardo Almeida, analyst of PIM Regional.

Also according to Mr. Almeida, despite the reduction in unemployment, compensation is not high, which also impacts the results of the industries. “The average income is at a low level. Unemployment has been falling, but jobs are low-paid. This impacts household consumption and generates impacts on the production chain”.

Among the lows for the month of August, Pará and Santa Catarina were the places surveyed that most influenced the national result, with drops of 6.2% and 4.8%, respectively.

“The state of Pará was the main negative influence in the month of August, with the mining and quarrying sector (iron ore) being the main responsible for the result. As it is more concentrated in this sector, a small change can have a greater impact on the industry of Pará, which had the food sector in second place among the negative influences in the state. It is worth noticing that Pará has registered positive results for two months, with a cumulative gain of 15.2%”, explains the manager.

“Santa Catarina had the second biggest negative influence on the national result due to the fall in the production of rubber and plastic material and also in electrical machinery, appliances and  materials. Santa Catarina recorded four months of positive results, with a cumulative gain of 8.9%”, he adds.

The main positive results occurred in Amazonas (7.0%), eliminating the loss of 4.0% accumulated in the months of June and July, and Rio de Janeiro (3.3%), intensifying the expansion of 1.3% seen in the last month. Pernambuco remained stable (0.0%).

“Amazonas had the main result in absolute terms and the third positive influence on the national result. The sectors of computer equipment, electronic and optical products, other transportation equipment and beverages had more weight in the state's result and are three sectors with a lot of influence within the Amazonian industry. It is worth mentioning  that Amazonas shows this growth after two months of negative results, when it had a cumulative loss of 4.0%”, explains the IBGE analyst.

“Rio de Janeiro came in with the second positive influence on the national result. The sectors of basic metals, pharmaceutical industry and oil derivatives were the ones that had the highest weight in this growth in the Rio de Janeiro industry”, adds Mr. Almeida.

The state of São Paulo, the country's largest industrial park, increased by 2.6% compared to July, when it had fallen by 0.4%. This result represented the greatest positive influence on the national industrial result.

“The Motor vehicle sector, which had the greatest influence on the negative result of the São Paulo industry in July, continued to have the greatest weight in August, but now positively. This is a sector that has been showing caution in its production and facing adversities due to economic factors, such as the shortage of inputs and the price rise of raw materials. As a result, a balance between supply and demand may have generated this drop in the previous month and a recovery for the month of August”, analyzes Mr. Almeida.

In comparison with August 2021, the industry grew 2.8%, with ten of the fifteen places surveyed showing positive rates. In August 2022, Mato Grosso (29.9%) and Amazonas (13.4%) registered double-digit expansions, while Espírito Santo (-12.2%) and Pará (-8.7%) registered the sharpest decreases. It is worth mentioning that August 2022 (23 days) had one more business day than the same month in 2021.

More about the survey

Since the 1970s, PIM Regional has been producing short-term indicators relating to the behavior of the real product of mining and quarrying and manufacturing industries. It brings, monthly, indexes for 14 Federation Units whose participation is of at least 1% in the total value added of the national industry and also for the Northeast Region. The areas covered are Amazonas, Pará, Ceará, Pernambuco, Bahia, Minas Gerais, Espírito Santo, Rio de Janeiro, São Paulo, Paraná, Santa Catarina, Rio Grande do Sul, Mato Grosso, Goiás and the Northeast Region.

The survey results can also be consulted on Sidra, the IBGE database.

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