The industrial production indexes for the month of June confirm the phase of sustained rhythm of productive activity.  The rates are positive according to the different comparisons.  In the comparison with the previous month, in the series free of seasonal influences, the increase is of 0.5%, the fourth consecutive in this type of indicator.  In comparison to the months of the first semester of 2003, when the production trend was in decline, the rates were higher: 7.7% in the accrued year and 13.0% compared to June of last year.  In the comparison with the two first quarters of the previous year, the production grew 6.0% in the first one, from January-March, and 9.3% in the following quarter.  The annual rate, the accrued indicator for the last twelve months (4.0%), registered an acceleration compared to May’s result (2.8%).

The variation observed between May and June of the current year (0.5%) results from the expansion in 13 out of 23 industrial areas that are seasonally adjusted series.  The highlights are the textile (4.7%), machines and equipment (2.3%), perfumes (7.6%) and automotive vehicle (1.3%) industries.  The main negative influences among the industries in decrease are basic metallurgy (-1.3%), food (-0.8%), beverages (-6.8%), cellulose and paper (-1.4%) and oil refining and alcohol production (-0.4%).

By categories of use, still for the month of May, the results are as follows: capital goods (0.2%), intermediate goods (-0.4%), durable consumer goods (3.8%) and semi-durable and non-durable consumer goods (0.5%).  The intermediate goods segment registered a decrease after five months of growth in this type of indicator, a period in which it accrued an increase of 4.4% (May 04/December 03).

Durable and capital goods lead expansion

Also according tot he series of seasonally adjusted indexes, it is noted that the industrial sector as a whole has grown during the last four months, having accrued a rate of 5.4% between February and June of this year, a movement that has been mainly influenced by durable consumer goods (13.1% in the same period) and capital goods (9.7%).  The sector that is most dependent on the evolution of internal demand, semi and non-durable consumer goods, has registered recovery movements most recently, with positive variations taking place as of April and at a more moderate rhythm of recovery than the remainder of the industry (2.2% between June and March).

The maintenance of the ascending trend in the last months caused the industry to register, in June, the highest level of the historic series, in the seasonally adjusted fixed base index.  This month, production remained 7.8% above the average observed in 2003.

The comparison between the second and first quarters of the year (seasonally adjusted series) demonstrates an increase of 3.1% for the industry’s total, with durable consumer goods (7.3%) and capital goods (6.3%) obtaining the highest rates, followed by intermediate goods (2.6%) and semi and non-durable goods (0.8%).

Industry grows 7.7% from January to June

In the first semester of the year, compared to the same period in 2003, the industry’s total growth was of 7.7%, with 22 activities registering an increase in production.  The manufacturing of vehicles (26.1%) maintained its leadership in activity, in terms of impact on the global index.  The other relevant positive contributions were of machines and equipment (16.2%), electronic and communications material (35.4%) and other chemical products (7.9%).  In contrast, among the five industries with decreases, the one that exerted most pressure on the global rate continued to be pharmaceuticals (-5.9%), followed by publishing and printing (-1.0%) and footwear and leather (-3.3%).  The indexes by category of use demonstrated that, in the end of the first semester, all registered growth.  The capital goods (25.2%) and durable consumer goods (23.9%) segments lead the expansion, while intermediate goods (6.2%) and semi-durable and non-durable consumer goods (2.1%) remained below the industry’s average.

Industry grows 13.0% in comparison to June of last year

In comparison to June 2003, industrial production registered an increase of 13.0%, maintaining a sequence of positive rates for ten months.  The magnitude of this result is explained, in large part, by the low base of comparison, since the activity decreased throughout the entire first semester of 2003.  In addition, June 2004 had one working day more than June of last year.  In the meantime, the greater majority (24) of the 27 surveyed sectors demonstrated positive rates, being that automotive vehicles (40.7%) remained as the industry with the greatest positive impact on the development of the global rate, followed by machines and equipment (31.3%), other chemical products (17.4%) and food (7.2%).  The three activities that demonstrated a decrease in comparison to June 2003, in order of importance, are: oil refining and alcohol production (-4.3%), pharmaceuticals (-4.6%) and beverages (-1.1%).

The durable goods sector leads, with strong growth from automobiles, cellular phones and household appliances

Still comparison June 2004 with June 2003, the indexes by category of use confirm the maintenance of positive results, with the four categories registering growth in this period.  Durable consumer goods (36.7%) and capital goods (32.8%) are highlighted, growing well above the national average (13.0%), while intermediate goods and semi-durable and non-durable consumer goods registered rates of 10.7% and 6.3%, respectively.

The durable consumer goods sector, in addition to benefiting from the maintenance of a strong rhythm of growth among automobile manufacturers, has been positively influenced by the performance of cellular phones and domestic appliances.  In the capital goods sector, the most notable items are telephony equipment and trucks.  The performance of intermediate goods was influenced by the favorable behavior of several of its sub-sectors, highlighting elaborated industrial inputs, parts and accessories for industrial transport equipment and basic industrial inputs.  It should also be noted that the production of inputs for civil construction, with an increase of 11.7%, registered the fourth consecutive positive rate.  The semi-durable and non-durable consumer goods sector registered a positive behavior in all of its sub-sectors, with exception of fuels (-7.2%).  In this category of use, the main positive impact has been from food and beverages elaborated for domestic consumption (7.8%).

In summary, the indexes for June demonstrate the continuing growth in the production rhythm, with the second quarter increasing 3.1% compared to the previous period, in a movement that also reaches the segment of semi and non-durable goods (0.8%) and that has capital goods (6.3%) and durable consumer goods (7.3%) as its most dynamic areas.  The intermediate goods sector, that in the passing from the first to the second quarter advanced 2.6%, it the one that presents the longest growth period.

In addition to the direct impact of foreign sales on intermediate goods, as well as durable consumer goods (such as automobiles) and capital goods (such as tractors and trucks), it is noted that the internal demand for durable goods also represented an important factor in the industrial performance in the first semester of this year.  Discreet signs of an increase of production in industries that are more dependent on the evolution of wages (clothing and pharmaceuticals, for example) also appeared in more recent months.

With regards for the production of capital goods, which grew 25.2% in the first semester, it is possible to observe a generalized growth pattern in its sub-sectors.  In comparison between the 2nd quarter of 2004 with the 2nd quarter of 2003, when the category as a whole advanced 28.4%, the indexes by sub-sectors were the following: agricultural machines and equipment (10.7%); capital goods for construction (28.4%); capital goods for industrial purposes (17.7%); for the transport sector (33.5%); for mixed use (29.9%) and for the electric energy sector (11.5%).