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National industry

Industrial production drops 0.6% in April

Section: Economic Statistics | Igor Ferreira

June 02, 2023 09h00 AM | Last Updated: June 12, 2023 05h45 PM

Food products exerted the major negative influence (-3.2%) on the April result - Photo: Jose Fernando Ogura/AEN-PR

Brazilian industrial production fell by 0.6% from March to April. The loss of pace comes after the 1.0% advance seen in the previous month, which interrupted two consecutive months of decline. In relation to April 2022, the industry had a decrease of 2.7% in its production. In the year, it accumulates a decrease of 1.0% and, in 12 months, a negative change of 0.2%. With these results, the industry is still 2.0% below the pre-pandemic level (February 2020) and 18.5% below the highest point of the time series, reached in May 2011. Data are from the Industrial Survey (PIM), released today (2) by the IBGE.

“Unlike the last three months of last year, when we had a cumulative positive balance of 1.5%, at the beginning of 2023 there is a greater presence of negative results. In April, we observed a greater spread of declines in industrial production, reaching 16 of the 25 industrial sectors investigated. This greater spread of negative results has not been seen since October 2022”, analyzes PIM manager André Macedo.

The main negative influences came from food products (-3.2%), machinery and equipment (-9.9%) and motor vehicles, trailers and bodies (-4.6%).

Responsible for the greatest negative impact on this month's result, the sector of food products registered the fourth consecutive month of fall in production, period in which it accumulated a loss of 7.3%. “Before this sequence of declines, the sector presented positive results for three consecutive months, generating a cumulative gain of 20.2%. So it's still a positive figure. In April there was a great negative influence of sugar production. This was directly related to a greater volume of rainfall, especially in the second half of the month, in the sugarcane producing regions of the Center-South region of the country”, explains Mr. Macedo. On the other hand, the growth resumption in beef production, after being affected by restrictions on exports to China, attenuated the decline in the sector.

The sector of machinery and equipment (-9.9%), in turn, eliminated the growth of 6.7% observed in March. This month, there was a widespread decrease in its main groups.

In the case of motor vehicles, trailers and bodies (-4.6%), after registering zero change in the months of February and March, a new reduction in took place. “Motor vehicles and trucks, which are the items with the greatest weight in the activity, had a drop in production”, says André Macedo. He emphasizes that this segment is an example of the effects of maintaining interest rates at higher levels, due to the increase in prices and the greater difficulty in granting credit. High default rates and higher household indebtedness also affect the sector and the industry as a whole. In addition to these factors, he mentions that “the difficulty in obtaining electronic components for the sector remains and, as a result, there is a greater occurrence of interruptions, reduced working hours and collective vacations.”

Computer equipment, electronic and optical products (-9.4%), mining and quarrying (-1.1%), beverages (-3.6%), fabricated metal products (-3.3%), other transportation equipment (-5.2%) and electric machinery, appliances and material (-2.9%) also stood out negatively.

On the other hand, among the nine activities that presented increase in production, the sector of coke, petroleum products and biofuels (3.6%) was the one that exerted the greatest positive impact in April. This is the third positive result in a row for the sector, a period in which it accumulated growth of 6.3%.

In relation to the major economic categories, still in comparison with March, the sectors of capital goods (-11.5%) and durable consumer goods (-6.9%) showed negative rates. Semi-durable and non-durable consumer goods (1.1%) and intermediate goods (0.4%) increased in April. While the first eliminated the cumulative loss of 0.6% from February to March, the second accumulated expansion of 1.8% due to three consecutive months of increased production.

Industrial activity drops 2.7% year-on-year

Compared to April 2022, industry decreased by 2.7%, with negative results in 18 of the 25 surveyed branches. The main negative influences came from chemical products (-12.2%), motor vehicles, trailers and bodies (-9.7%) and machinery and equipment (-14.3%).

Computer equipment, electronic and optical products (-15.7%), basic metals (-5.5%), electrical machinery, equipment and material (-12.2%), fabricated metal products (-8.7%), non-metallic mineral products (-9.6%), beverages (-7.2%), wearing apparel and accessories (-9.9%) and wood products (-15.9%) also decreased.

On the side of increases, coke, petroleum products and biofuels (3.2%) and pharmaceuticals (18.1%) were responsible for the main positive influences.

It is also worth mentioning the positive results of food products (2.0%), mining and quarrying industries (1.4%) and other transportation equipment (19.2%).

More about the survey

PIM Brasil has been producing short-term indicators since the 1970s relating to the behavior of real output in the mining and quarrying and manufacturing industries. As of March 2023, the release of the new series of monthly industrial production indices began, after reformulation to update the sample of activities, products and informants; develop a new index weighting structure based on the latest industrial statistics; update of the research reference year; and the incorportion of new units of the federation in the dissemination of the regional results of the survey. These methodological changes are necessary and seek to incorporate the economic changes in society. The search results can also be consulted in the Sidra database. The next release of industrial production - Brazil will be on July 4th.

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