The industrial production of July decreased by 2.5% in comparison with June, considering the seasonally adjusted series. In relation to July 2004, the index showed expansion of 0.5%. The acccumulated growth from January to July reached 4.3%, a rate inferior to the 5.0% registered in the first semester of the year. The rate accumulated from January to July shows a trend towards deceleration, having gone from 6.7% in June to 5.8% in July.

The fall of industrial production by 2.5% interrupted a period of expansion which lasted four months, and represented the major loss concerning this indicator since January 2003. It also caused production levels to reach a position slightly above that of April. Moreover, the negative rate contributed to the deceleration in the comparison referring to longer periods, although even in this case there have been positive results. The rate which reflects the comparison of this month with the same month of the previous year (0.5%) was the lowest since September 2003, and the quarterly moving average was practically stable, with change of only 0.2% from June to July 2005.

The decrease observed in July had a generalized profile and reached twenty of the twenty-three subsectors surveyed (with seasonally adjusted series) and all the categories of use. Among the industries which reduced their production, the most significant overall results came from automotive vehicles (4.6%), electronic and communication equipment (-10.7%) and machinery and equipment (-5.7%). It is worth mentioning that the automotive industry (which expanded by 8.3% between May and June) and the industry of electronic and communication equipment had grown significantly in the previous months. Still in comparison with the previous month, the only sectors with a similar performance were petroleum refinement and alcohol production (2.6%), pharmaceutical (4.2%) and cellulose and paper (1.7%)

There was decline in all the categories of use in comparison with the previous month. Capital goods (-76%) and durable consumer goods (-5.9%) presented the lowest negative results, after two months of positive accumulated rates: 9.6% and 13.5%, respectively. Intermediate goods presented, in July, a decrease of 1.9%, interrupting a sequence of four positive results (during which it had grown by 4.3%) The category of semi-durable and non-durable consumer goods, having fallen by 0.9%, has again reached a level superior to that of last April.

In relation to July 2004, industrial production grew by 0.5%. The mining and quarrying subsector (10.9%) accounted for this slightly positive result, once the manufacturing industry had null growth rates and reached its lowest result since September 2003. In the comparison July 2005 / July 2004, it can be observed that in 2005, July had 21 working days, one less than in 2004.

There was expansion in ten of the twenty-six activities surveyed in the manufacturing industry. Petroleum refinement and alcohol production (8.6%), electronic material and communication equipment (20.5%) editing and printing (17.7%) were the major positive impacts on the overall rate. In these industries, the highlights were, respectively, the performance of: diesel and gasoline; mobile telephones and television sets; magazines and newspapers. Among the sixteen subsectors presenting falling production, the ones which most influenced the average of the Brazilian industry were machinery and equipment (-8.8%) and metallurgy (-6.8%), from which can be highlighted, respectively, falls in the production of compressors and motor compressors, of harvesting machines; and of ingots, metal blocks and steel plates.

Considering the categories of use, the index July 2005/July 2004 grew above the average overall rate of durable consumer goods (13.2%) and of semi-durable and non-durable consumer goods (3.1%). The production of capital goods (-4.4%) and of intermediate goods (1.8%) fell, after a sequence of three positive results. In the segment of durable consumer goods, there was expansion of the automotive industry (12.2%) and of the manufacturing of mobile telephones (75.2%), whereas the subsector of electrical appliances was stable (0.2%). Favorable credit conditions and good performance of exports are the factors which contributed to the positive results of the category of durable consumer goods. The industry of semi-durable and non-durable consumer goods was affected, mainly, by the subsectors of other non-durable consumer goods (7.9%) and fuels (12.1%), with magazines and medicines, and gasoline and fuel alcohol, respectively, as the main highlights.

Still concerning the monthly comparison, the production of capital goods underwent a general reduction. Besides the adverse performance of agricultural machines and equipment (-41.6%), which has had a sequence of eleven negative rates, the highlights were the falls of industrial machinery and equipment (-12.1%), of transportation equipment (-5.7%) and of the production of capital goods for mixed use (-0.8%). The only subsectors presenting positive results were capital goods for construction (24.5%) and for electric energy (21.9%). Intermediate goods also presented reduction in most of its subsectors, especially industrial inputs (-4.3%), especially due to the decrease of ingots, metal blocks and steel plates; and fertilizers. It is also worth mentioning the negative rates of packaging (-4.9%) and inputs for construction (-3.7%), two subsectors which had previously had a three-month sequence of positive rates. On the other hand, fuels and basic fuels (petroleum), with a rate of 14.1%, and fuels and complex fuels (diesel and other fuel oils), 8.3%, were the only positive contributions.

The negative result of July affected the quarterly moving average, causing it to become almost stable. The rate registered in the quarter ending in July surpassed by 0.2% the figure of June. A similar effect was observed in capital goods (0.4%), intermediate capital goods (0.1%) and semi-durable and non-durable consumer goods (0.1%). Durable consumer goods remained as the most dynamic category of use throughout the year.

Rate accumulated from January to July 2005 grows by 4.3%

The indicator accumulated from January to July 2005/January-July 2004 grew by 4.3%. The mining and quarrying subsector registered growth of 10.5% and the manufacturing industry grew by 4.0%, with the contribution from twenty-one subsectors among the twenty-six surveyed. The leader, in terms of impact on the overall result for the industry was automotive vehicles (10.6%), followed by electronic and communication equipment (21.3%). The major negative contribution came from metallurgy (-2.8%). In terms of categories of use, there were only positive rates: durable consumer goods (16.2%), semi-durable and non-durable consumer goods (6.1%), capital goods (2.6%) and intermediate goods (1,8%). These results point to a pattern of growth, in 2005, based on the categories of durable and non-durable consumer goods, which lead the expansion for this type of indicator.