The 0.6% decline in national industrial production in April compared to March reflected on ten of the 15 areas surveyed by the Regional Monthly Survey of Industry (PIM). The results, released today (13) by the IBGE, show that the biggest falls in industry were in Amazonas (-14.2%) and Pernambuco (-5.5%). On the other hand, Rio Grande do Sul (2.2%) had the highest increase. In the comparison between April 2023 and April 2022, the national industry, which decreased by 2.7%, was followed by 12 of the 18 areas surveyed.

"This regional spread of the industry's retraction is a reflection of an atmosphere of uncertainty in the sector", explains Bernardo Almeida,  analyst at PIM Regional. “The situation the country is going through, with high inflation, unemployment still at a level considered high, with hiring below what is needed, directly impacts the purchasing power of families, and consequently, the industry's production chain” he adds.

The place with the biggest drop, Amazonas, also had the greatest influence on the national result. The fall in April interrupts four consecutive months of growth in production, when it accumulated gains of 22.3%. “This retraction is explained by the underperformance of the sector of computer equipment and electronics, which are quite influential in the state” says Mr. Almeida. Other activities also impacted the result of the Amazonian industry, such as beverages and other transportation equipment.

Although it had the second biggest drop of the month, Pernambuco was only the fifth state in influence. The negative result in April comes after three months of positive rate, which resulted in a cumulative gain of 33.5%. "There was pressure from the sectors of vehicles and food", says the analyst. The industry of Minas Gerais retreated 3% in the month, and was the second in negative influence. The fall from March to April eliminates part of the gains of the previous month. The performance of the mining production was affected by the sector of chemical products and vehicles.

Ceará (-3.7%), Northeast Region (-2.4%), Paraná (-2.2%), Rio de Janeiro (-1.8%), Goiás (-1.5%) and Espírito Santo (-1.2%) were other locations that presented more intense falls than the national average. São paulo, as the main industrial park in the country, had a retraction of 0.2% driven by the activities of vehicles, machinery and equipment and chemical products. With this result, the São Paulo industry remains 24.9% below the highest level in the series (March 2011) and 3.2% below the pre-pandemic level (February 2020).

Among the highs, Rio Grande do Sul had the main growth, being the only positive national influence. The state of Rio Grande do Sul recorded the second consecutive positive rate, accumulating an increase of 8.1% in March and April. The industry in the state was influenced by the sectors of oil derivatives and, secondarily, tobacco products. As a result, industrial production in the state is 1.9% below the pre-pandemic level and 14.8% below the highest level in the series (October 2013). Santa Catarina (1.1%), Bahia (1.1%), Pará (0.3%) and Mato Grosso (0.1%) registered the other increases in April.

Industry retreats in 12 of 18 areas in the interannual comparison

The industry retreated 2.7% compared to March last year and, regionally, 12 of the 18 areas surveyed accompanied the negative rate. “It is worth mentioning that April 2023 had one less working day (18 days) than April 2022, which had 19 days,” says Mr. Almeida.

Maranhão had the most intense decrease, with 16.4%. mainly influenced by the negative behavior observed in the sectors of basic metals (aluminum oxide), mining and quarrying industries (pelletized or sintered iron ores and natural gas) and beverages (beers, draft beer and soft drinks).

Ceará (-7.8%), Rio Grande do Sul (-7.2%), Pernambuco (-6.7%), Santa Catarina (-5.9%), Mato Grosso do Sul (-5.4% ), Northeast Region (-4.8%), Rio de Janeiro (-4.2%) and São Paulo (-3.6%) also presented sharper falls than the national average. Espírito Santo (-1.4%), Goiás (-1.3%) and Paraná (-0.9%) completed the list of places with decrease in production in the interannual comparison.

Among the highs, Rio Grande do Norte (14.5%) had the biggest expansion, driven by the activities of coke, petroleum products and biofuels (fuel oils) and mining and quarrying industries (sea salt). Mato Grosso (11%) also showed double-digit growth in production, thanks to the performance of the sectors of food products (fresh or cooled beef) and coke, petroleum products and biofuels (ethyl alcohol). Pará (5.1%), Minas Gerais (2.2%), Bahia (0.8%) and Amazonas (0.6%) were the other positive results in April in this index.

“The result of the interannual indicator is a clear demonstration of the loss of rhythm of the national industry”, says Mr. Almeida. “From the supply perspective, shortages of inputs and rising prices for raw materials, observed since the isolation caused by the Covid-19 pandemic, are also factors for a certain caution in decision-making in industrial production”, he concludes.

More about the survey

PIM Regional has produced, since the 1970s, short-term indicators relating to the behavior of real output in mining and quarrying and manufacturing industries. It brings, monthly, indices for 17 states whose share is at least 0.5% in the total value of national industrial transformation, and also for the Northeast as a whole: Amazonas, Pará, Maranhão, Ceará, Rio Grande do Norte, Pernambuco, Bahia, Minas Gerais, Espírito Santo, Rio de Janeiro, São Paulo, Paraná, Santa Catarina, Rio Grande do Sul, Mato Grosso do Sul, Mato Grosso, Goiás and Northeast Region. The survey results can also be consulted on Sidra, the IBGE database. The next release of this survey will be on July 13.