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National industry

Industry grows 1.1% in December and closes 2023 with a positive rate of 0.2%

Section: Economic Statistics | Carmen Nery

February 02, 2024 09h00 AM | Last Updated: February 02, 2024 04h18 PM

Iron ore contributed to the positive results in the month and year - Photo: Agência Vale

Industrial production grew 1.1% in December 2023, the fifth consecutive month of growth in production, after also recording positive rates in November (0.7%), October (0.2%), September (0.2%) and August 2023 (0.4%). As a result, industrial production exceeds the pre-pandemic level (0.7% above February 2020); but it is still 16.3% below the record level reached in May 2011. The data are from the Monthly Survey of Industry (PIM), released today (2) by the IBGE.

“In the December 2023 index, a widespread profile of positive rates is observed, reaching three of the four economic categories and 14 of the 25 industrial sectors surveyed. Among the activities, one of the highlights was mining and quarrying industries, which advanced 2.2% in the second consecutive month of growth in production, supported especially by greater ore extraction. The second highlight is food products, which accumulated growth of 9.1% and six consecutive months of advances in production”, highlights André Macedo, manager of the Monthly Survey of Industry.

On the other hand, among the ten activities that showed a drop in production, petroleum products and biofuels and chemical products exerted the main negative impacts in December 2023, with both eliminating the advances recorded in November.

In the year, the industrial sector accumulates a positive change of 0.2%

In the cumulative indicator in the year, the sector accumulated a positive change of 0.2% in 2023. In 2022, it had closed with a drop of 0.7%. Mr. Macedo highlights that, at the end of 2023, the characteristic of predominance of industrial activities with negative results remained, since only nine of the 25 branches showed growth in production.

The positive highlights were registered by mining and quarrying industries, petroleum products and biofuels and food products. Among the activities with negative indicators, motor vehicles, chemical products, machinery and equipment, electrical machines, devices and materials and IT equipment, electronic and optical products stand out.

“When we evaluate the year 2023, we observe two distinct periods. The first half of the year was marked by a predominantly negative behavior in the general industry, with a drop of 0.3% in the period. In the second half of the year, there is clearly an improvement in the pace of industrial production, resulting in growth of 0.5%. This is also quite visible when we look at the month on month indicator, with five months of consecutive positive rates, culminating in the 1.1% expansion in December. As a result, the cumulative result for the year, which remained negative for a good part of 2023, became positive, closing the year with a positive change of 0.2%”, analyzes Mr. Macedo.

He notes that the overall industry result in 2023 was driven by mining and quarrying industries – whose growth is supported by both the extraction of oil and iron ores. The manufacturing industry, which has the majority of industrial branches with negative results, had a lower intensity behavior and closed the year with a decrease of 1.0%, a sharper drop than that seen in 2022, when it had decreased by 0.4%.

Mr. Macedo explains that the industry's results in 2023 are being affected by the gradual improvement in macroeconomic and employment and income indicators. “This recent advance in industrial production can be explained by the positive behavior of the labor market, with a reduction in the unemployment rate and an increase in the wagebill; and by inflation at more controlled levels, especially in the food products segment. It is also worth highlighting the positive contribution of exports, especially with regard to commodities. Throughout the year, we also observed the start of monetary policy flexibilization with a reduction in interest rates. These are important factors to understand the industry's recent movement towards the positive results. But it is worth noting that this is a result very close to stability”, highlights Mr. Macedo.

More about the survey

PIM Brazil has been producing short-term indicators since the 1970s relating to the behavior of the real product of the mining and quarrying and manufacturing industries. As of March 2023, the publication of the new series of monthly industrial production indices began, after reformulation: to update the sample of activities, products and respondents; to develop a new index weighting structure based on the most recent industrial statistics; to update the survey reference year; and to include new Federation Units in the dissemination of regional survey results. These methodological changes are necessary and seek to include the economic changes of society.

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

The next release of industrial production – Brazil, with results for January 2024, will be on March 6th.

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