The industrial output changed 0.1% in July 2016 over the previous month (not seasonally adjusted), the fifth positive result in a row in this kind of comparison, a cumulative growth of 3.7% in the period. Even with the positive behavior seen in the last five months, the industry just offset part of the loss recorded throughout 2015 and is still 18.2% below the level registered in June 2013.

As compared with July 2015, the industry fell 6.6% (not seasonally adjusted) 29th negative rate in a row in this kind of comparison and the sharper than the one seen in the previous month (-5.8%).

The index was also negative in the cumulative index of the first seven months of the year, with a 8.7% reduction in 2016. However, there was a slight reduction in the magnitude of decline over the result of the first semester of the year (-9.1%).

The annualized rate, which stands for the cumulative figure over the last 12 months, with a decrease of 9.6% in July 2016, shrank slightly the pace of decline over the one registered in June (-9.8%).

In these comparisons, there was prevalence of negative rates among the major economic categories and the activities surveyed, with a highlight to the sharper losses associated to durable consumer goods and capital goods.

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Indicators of industrial Output by Major Economic Category
Brazil - July 2016

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria
*Seasonally-adjusted series

Eleven of 24 sectors increase production against June

In the increase of 0.1% of the industrial activity between June and July 2016, 11 out of the 24 sectors surveyed registered positive rates, highlighted by the advance of 2.0% recorded by food products, which interrupted two consecutive months of dropping production, a cumulative loss of 6.4% in this period.

Important positive contributions came from mining and quarrying industries (1.6%), computer equipment, electronic and optical products (5.8%), basic metals (1.6%), coke, petroleum products and biofuels (0.4%) and rubber and plastic products (1.3%).

Among the 13 sectors that decreased the output in July, the most relevant performances came from toiletries, soaps, cleaning and personal hygiene products (-2.8%), pharm-chemicals and pharmaceuticals (-7.3%), motor vehicles, trailers and bodies (-1.7%), leather products, traveling items and footwear (-6.0%), tobacco products (-15.1%), manufacture of wearing apparel and accessories (-2.4%) and other chemicals (-3.2%). These activities reported positive rates in June: 5.7%, 2.9%, 8.4%, 10.6%, 1.3%, 9.5% and 5.0%, respectively.

Having advanced 3.3%, still comparing with the immediately previous month, durable consumer goods posted the steepest expansion in July 2016 among the major economic categories and registered the third consecutive positive rate, a cumulative gain of 11.7% in this period. The segment of intermediate goods (1.6%) also increased the output and stepped up the expansion reported last month (0.8%). The sectors producing capital goods (-2.7%) and semi and non-durable consumer goods (-1.9%) posted negative figures in July 2016. The former interrupted six consecutive months of increasing production, a period in which it registered a cumulative advance of 14.7%. The latter retreated once again after increasing 0.9% last month.

Still in the seasonally-adjusted series, the evolution of the quarterly moving average index expanded 0.6% in the quarter ended in July 2016 compared with the level reached in the previous month, after increasing in June (0.7%) and May (0.8%), when it interrupted the downward trend started in October 2014.

Industry declines 6.6% against July 2015

Compared with July 2015, the industry retreated 6.6% in July 2016 and recorded widespread negative figures, reaching 22 out of the 26 sectors, 57 out of the 79 groups and 66.2% out of the 805 products surveyed. July 2016 (21 days) had less two business days than the same month a year ago (23).

Among the activities, coke, petroleum products and biofuels (-10.7%), mining and quarrying industries (-9.9%) and motor vehicles, trailers and bodies (-13.8%) exerted the biggest negative influences. Other relevant negative contributions came from machinery and equipment (-13.3%), fabricated metal products (-13.4%), tobacco products (-44.2%), non-metallic mineral products (-9.7%), other transportation equipment (-22.1%), pharm-chemicals and pharmaceuticals (-10.7%), computer equipment, electronic and optical products (-13.6%), manufacture of wearing apparel and accessories (-10.4%), printing and reproduction of recorded media (-22.5%) and furniture (-16.5%).

The activity of food products (5.4%) exerted the major positive pressure this month, leveraged by the advances in the production of VHP and crystallized sugar.

Still comparing with the same month a year ago, durable consumer goods (-16.2%) and capital goods (-11.9%) registered the steepest declines among the major economic categories. The sectors producing semi and non-durable consumer goods (-6.3%) and intermediate goods  (-5.0%) also recorded negative rates this month, yet both declining less than the national average (-6.6%).

The segment of durable consumer goods retreated 16.2% in the monthly index, posting the 29th consecutive negative figure in this type of comparison and more intense than in the previous month (-7.2%). This sector was particularly pressed by the reduced manufacturing of cars (-16.4%) and brown goods (-17.3%), influenced, to a great extent, by the reduced shifts and collective vacations in a number of producing units. Other important negative impacts came from motorcycles (-24.8%), white goods (-2.9%) and furniture (-16.6%), whereas the main positive result was reported by the group of other household appliances (13.6%).

The sector producing capital goods (-11.9%) registered the 29th consecutive negative rate in the monthly index and the most intense since last April (-16.1%). In the formation of the index this month, this segment was influenced by the drop seen in the majority of its groups, highlighted by the reduction in capital goods for industrial use (-16.2%) and for transportation equipment (-11.9%). The other negative rates were registered by capital goods for mixed use (-18.0%),for agriculture (-6.6%) and for electricity (-0.2%), whereas capital goods for construction (12.0%) recorded the only positive figure in July 2016.

Still comparing with the same month a year ago, the production of semi and non-durable consumer goods retreated 6.3% in July 2016, the third consecutive negative rate and the most intense since last January (-6.7%). This performance was explained by the declines in the groups of non-durable (-11.0%), food and beverages for domestic consumption (-5.3%) and semi-durable (-9.7%). The group of fuels (2.0%) posted the only positive figure in this category, leveraged by the increased manufacture of ethyl alcohol and motor gasoline.

The sector of intermediate goods (-5.0%) registered the 28th consecutive negative rate in the monthly index, though less intense than in the previous month (-7.4%). This result was explained by the declines in the products associated with the activities of coke, petroleum products and biofuels (-16.1%), mining and quarrying industries (-9.9%), motor vehicles, trailers and bodies (-12.2%), fabricated metal products (-12.3%), non-metallic mineral products (-9.8%), machinery and equipment (-15.7%), rubber and plastic products (-3.0%), basic metals (-1.4%), other chemicals (-1.2%), pulp, paper and paper products (-1.8%) and textiles (-1.8%). The only positive pressure came from food products (16.9%). It is also worth mentioning the reductions in the groups of typical inputs for civil construction (-10.9%), the 29th consecutive decline in the comparison with the same month in the previous year, and of packaging (-3.3%), the 19th negative rate in a row.

Cumulative index in 2016 falls 8.7%

Compared with the same period last year, the industrial sector dropped 8.7% in the cumulative index for the January-July 2016 period, showing a widespread profile of negative rates. Four major economic categories, 24 out of the 26 sectors, 62 out of the 79 groups and 74.3% of the 805 products surveyed registered a drop in the output.

Among the activities, mining and quarrying industries (-13.4%) and motor vehicles, trailers and bodies (-20.2%) exerted the biggest negative influences, pressed by iron ores, in the former, and by cars, trucks and car pieces, in the latter. Other relevant negative contributions came from coke, petroleum products and biofuels (-6.7%), machinery and equipment (-15.6%), basic metals (-10.3%), computer equipment, electronic and optical products (-25.7%), fabricated metal products (-13.5%), non-metallic mineral products (-11.5%), other transportation equipment (-22.0%), rubber and plastic products (-10.0%), electrical machinery and apparatus (-11.2%), manufacture of wearing apparel and accessories (-10.3%) and furniture (-15.2%).

Among the activities that increased in 2016, food products (2.6%) exerted the biggest influence, leveraged by the advance in the manufacture of VHP and crystallized sugar. It is also worth mentioning the positive result registered by the sector of pulp, paper and paper products (1.8%), explained by the item chemical pulp.

Among the major economic categories, the behavior of the results of the first seven months of 2016 showed lower dynamism for durable consumer goods (-21.4%) and capital goods (-18.5%), particularly pressed by the reduction in the manufacture of cars (-20.9%) and household appliances (-22.8%), in the former, and of capital goods for transportation equipment (-18.9%), in the latter. The segments of intermediate goods (-8.3%) and semi and non-durable consumer goods (-2.9%) also recorded negative rates. The former retreated below the national average (-8.7%), and the latter posted the most moderate drop among the major economic categories.