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National industry

Industrial production changes by 0.1% in June and closes first semester down by 0.3%

Section: Economic Statistics | Caio Belandi

August 01, 2023 09h00 AM | Last Updated: August 03, 2023 10h42 PM

Production in the mining and quarrying sector closed the first semester with an increase of 5.8% - Photo: André Motta de Souza/Petrobras

The industrial production in the country changed by 0.1% from May to June, the second consecutive positive rate. In May, industry had reached 0.3%. Against June 2022, there was an increase of 0.3%. In the year, the cumulative result of industry shows a drop of 0.3%, whereas the cumulative index in 12 months had an increase of 0.1%. These data come from the Monthly Survey of Industry (PIM), released today (1) by the IBGE.

André Macedo, analyst of the survey, explains that the result of June shows a continuation of positive results, although at a rate close to stability. “However, these two months with increase in sequence did not make up for the loss in August, when the rate was -0.6%.” According to the researcher, vel in “although the first semester of 2023 shows a positive balance of 0.5% in comparison with the level in December 2022, the pace is below what the sector needs to recover from losses from the recent past; after all, it is still 1.4% below the pre-pandemic level of February 2020,” he says.

The national output of industry, having decreased 0.3% in the first semester of the year, kept a negative rate but reduced the intensity of loss against the fours first months of 2023, when it had dropped 1%. Nevertheless, this movement was not observed in all the broad economic categories. Between these two periods, intermediate goods, which is also the main one, was the only sector to increase in dynamism, although with negative results. the category went from a decrease of 2.1% in the first four months to close the semester with a drop of 0.5%. “There is a very clear relationship with the mining and quarrying sector, which exerts leadership in terms of increase, with an expansion of 5.8% in the first six months of the year, with a highlight to iron ore and petroleum,” Mr. Macedo adds. The analyst also highlights the importance of results, within this category of food sectors, more specifically sugar and soybean products, and petroleum products. “The other economic categories did not make this movement towards improvement in the semester, even the segments that closed with positive rates,” the researcher highlights.

Result of June is driven by mining and quarrying sector

When the result of industry is analyzed from May to June 2023, only one of the four broad categories and 7 of the 25 sectors of indusyty surveyed recorded increase in production. The main positive contribution to the groups of activity came from mining and quarrying industry, which advanced 2.9% in June after an increase of 1.4% in May. “There were five positive rates in six months, influenced by the advance in extraction of oil and iron ore,” says Mr. Macedo, who highlights the sector is one of the few above the pre-pandemic level, with 7% of increase against the result of February 2020.

Other positive contributions came from manufacture of wearing apparel and accessories (4.9%), rubber products and plasct material (1.2%) and metal products (1.2%). On the other hand, among the 16 activities recording decrease, coke, petroleum products and biofuels (-3.6%), motor vechiles, trailers and bodies (-4.0%) and machinery and equipment (-4.5%) accounted for the main impacts in June 2023.

Production advances 0.3% in comparison with June 2022

Compared with the same month in 2022, the industrial sector grew 0.3%, with positive figures in two of the four broad economic categories, 8 of the 25 sectors, 34 of the 80 groups and 41.7% of the 789 products surveyed. It is worthy of mention that the so-called “calendar-effect” was not part of this comparison, since June 2023 had 21 business days, the same number as in June 2022.

Among the activities, mining and quarrying industry stood out, with an increase of 11%. Other sectors such as food productd (4.9%), coke, petroleum products and biofuels (4.3%), printing and reproduction of recorded media (23.7%) and other trasnportation equipment (10.1%) also accounted for positive contributions.

On the other hand, also against June 2022, among the 17 recording drops, chemicals (-9.4%), motor vehicles, trailers and bodies (-6.2%), electrical machinery and apparatus (-13.0%), machinery and equipment (-7.3%) and computer equipment, electronic and optica products (-12.6%) accounted for the main infleunces on the average of industry.

Among the broad economic categories, in the same comparison, intermediate goods recorded its main increase, having advanced 1.8%. The segment of semi and non-durable goods (0.1%) also recorded a positive result in the month, although lower than that of industry (0.3%). Durable consumer goods (-3.9%) and capital goods (-10.3%) dropped.

The sector of intermediate goods increased by 1.8% in June 2023 from the same period in 2022, second consecutive positive rate in this comparison, but less than against the previous month (3.1%). The production of semi and non-durable goods recorded a positive change of 0.1%, also the second increase in a row, but less intense that in the previous month (0.9%).

At last, the segment of durable consumer goods recorded a decrease of 3.9% in June 2023 against June 2022, having interrupted five months of increase in this type of comparison, whereas the sector of capital goods dropped by 10.3% and had its 10th consecutive negative rate in this comparison.

More on 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. March 2023 marked the beginning of the release of the new time series of monthly indexes of the industrial production, after a redesign to update the sample of activities, products and informants; create a new weighting structure of the indexes based on the most recent industrial statistics; update the base year of reference of the survey; and incorporate new Federation Units in the release of regional results of the survey. These methodological changes are required and they aim at incorporating the economic changes of the society. The survey results are also available at the  Sidradatabase. The next release of industrial production - Brasil will be on September 05th.

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