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National industry

Industrial output retreats 0.5% in April after rising for two months

Section: Economic Statistics | Carmen Nery

June 05, 2024 09h00 AM | Last Updated: June 05, 2024 05h18 PM

Drop in production of mining and quarrying industries takes national industrial output index to the negative side - Picture: Agência Vale

The industrial output retreated 0.5% between March and April, interrupting two consecutive months of growth, a period in which it accumulated an expansion of 1%. With these results, this sector is still 0.1% below the pre-pandemic period (February 2020) and 16.8% below the record level of May 2011.  The industrial sector grew 3.5% in the cumulative index in the year. It advanced 8.4% compared with April 2023. In 12 months, industry reached a cumulative expansion of 1.5%. These data are from the Monthly Industrial Survey (PIM), released today (5) by the IBGE.

Although the overall rate is on the negative side, positive figures prevail, with three out of four economic categories and 18 out of 25 industrial sectors expanding their output.

Among the activities, the most important negative influence came from mining and quarrying industries, which retreated 3.4% this month, after advancing 0.4% in March. Other relevant negative contributions came from food products (-0.6%), coke, petroleum products and biofuels (-0.6%) and computer equipment, electronic and optical products (-2.6%).

“There are some important weights among the segments that reduced their output, like the mining sector, which retreated 3.4% this month, due to the drop in the output of iron ore and petroleum, as well as the food sector, which dropped 0.6% in April as well. These two sectors represent nearly 30% of the industrial structure. Not mentioning other important activities that registered negative rates this month, like, for example, petroleum products and biofuels and computer equipment, electronic and optical products. Even with few activities reducing their output, their weights pressed the overall industry downward,” analyzes André Macedo, manager of the Monthly Survey of Industry.

He highlights that the mining sector still has a relevant positive surplus in the last months and it is above the pre-pandemic level. Therefore, 2024 begins with a lower intensity, after a 2023 characterized by a growing sector, leveraged by a bigger extraction of iron ore and petroleum.

“The food sector had a good performance in 2023 as well. It had grown 1.2% between January and February. Despite the drop of 0.6% in April, the balance in the year is still positive, standing 6.9% above the pre-pandemic level of February 2020. Some important products dropped, like meat, though it is a specific movement for April. On the positive side, for example, poultry meat, pork and sugar grew,” explains Macedo.

Car industry stood out on the positive side. Macedo highlights that the behavior of this segment has been improving, except for the previous month, which showed a retreat of 4.6%. Along the other months of 2024, it rose 4.4% in January, 3.5% in February and, now in April, it recorded a two-digit rise (13.2%).

“There is a recent improvement in the production of cars, trucks, car pieces and buses. This movement is related to the domestic market, influenced by the positive behavior of the labor market, with the increase in the number of employed persons and in the wage bill, flexibilization of the monetary policy with a reduction in the interest rate, and a drop in the defaults. These are important factors that should be considered to understand the higher dynamism in the production of motor vehicles in the last months. It should be highlighted that this sector is still below the pre-pandemic level,” completes the manager of the survey.

Industry advances 8.4% over April 2023 

Compared with the same period in 2023, the industrial sector grew 8.4% in April 2024, with positive figures in the four broad economic categories, 22 out of 25 sectors, 68 out of 80 groups and 70.3% of the 789 products surveyed. It is worth mentioning that April 2024 (22 days) had four business day more than the same month in the previous year (18).

The industrial sector advanced 3.5% in the first four-month period against a drop of 1.0% in the same period of 2023. It should be highlighted it had grown 1.0% in the last four-month period of 2023.

“Besides being on the positive side, the cumulative index in the year accelerated its growth in a widespread way: capital goods, associated with investments, growing; consumer goods advancing; intermediate goods, which concentrates raw material, also showing a positive rate. The comparison between the last four-month period of 2023 and the first one in 2024 shows a higher dynamism in the industrial production,” concludes Macedo.

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. 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 aim at incorporating the economic transformations of the society. The survey results can also be consulted at the Sidra database. 

The next release, related to May 2024, will be on July 3. The survey results can also be consulted on Sidra database.

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