The industrial production increased by 1.2% from January to February, according to the seasonally adjusted indexes.  In relation to February 2005, the sector increased by 5.4%, having expanded by 4.2% in the first two months of the year compared to the same period of 2005.  The annualized rate, indicator accumulated of the last twelve months, increased by 3.0% and interrupted the falling trend observed since March 2005. 

The expansion of 1.2% between January and February, had a generalized profile reaching 15 among 23 surveyed activities which have monthly seasonally adjusted series and three out of four categories of use.  Consumer durable goods (6.0%) registered the most pronounced change, followed by semi-durable and non-durable consumer goods (1.7%) and capital goods (1.5%).  After four months of positive results, where a value of 1.7% was accumulated, the sector of intermediate goods fell by 0.6%.  In the analysis by activities, it can be mentioned the following contributions: pharmaceuticals (26.2%),  automotive vehicles (4.8%), machines and equipments (2.6%) and beverages (3.7%).  It should be mentioned that the segments of pharmaceuticals and automotive vehicles had in January significant decreases of respectively 11.9% and 7.5%.  On the other hand, the sector of machines and equipment has been growing for five months, having accumulated a rate of 8.0% between September 2005 and  February 2006.  Also in the same period, the industry of beverages has been maintaining a continued expansion, accumulating a rate of 9.1%. Among the eight activities with decrease in this indicator, stand out basic metallurgy (-4.8%), other chemical products (-1.5%) and perfumery, soaps and cleaning products (-5.1%).

The indexes of quarterly moving average show that the trend of industrial production in the beginning of this year continues in a upward direction. Between January and February, the overall index increased by 0.8%,  a trend observed also in all the categories of use, with durable consumer goods (5.9%), semi-durable and non-durable consumer goods (1.2%) and capital goods (1.0%) growing above the overall average, while intermediate goods (0.3%) grew moderately.

In the comparison with February 2005, the Brazilian industry reached the fifth month of consecutive growth.  The rate of 5.4% is the highest since July 2005, supported in the expansion of 19  among 27 surveyed activities, especially: pharmaceuticals (42.0%), electronic material and communication equipment (26.6%) and mining and quarrying (12.8%). Among the eight industrial activities with fall, the main impact came from basic metallurgy (-4.7%), a result considerably influenced by the interruption of services in a big company of the sector.

Still in this comparison, all the categories of use increased, with durable consumer goods (14.9%) and capital goods (10.6%) indicating results above the average, followed by semi-durable and non-durable consumer goods (6.3%) and intermediate goods (2.5%).  Although an increase in the rhythm of expansion in the monthly indicator occurred, from 3.1% in January to 5.4% in February, in this last month, the growth occurred in a more concentrated form.  In January, among the 76 subsectors surveyed, 50 increased, while in February, the expansion reached 38 subsectors.

In the first two months of the year, industry increased by 4.2%, with 18 activities presenting  growth. The ones with major positive impact are in order: mining and quarrying, whose increase of 13.3% was influenced by the items iron ore and petroleum; computer and office equipment, influenced by the expansion of 65.8% of the item computers; and electronic material and communication equipment, which increased by 20.2%, as a consequence, mainly, of the performance of the items TV sets and mobile telephones. On the other hand, the main negative result came from edition and printing  (-6.4%), whose highlight was the item books of any category.

The analysis of the indicator accumulated in the first quarter, considering the indexes by categories of use, show that durable consumer goods (16.6%) maintains the leadership of growth. In this sector, stand out automobiles (15.5%), television sets (64.6%) and  mobile telephones (25.2%).  The segment of capital goods  reached a rate of 8.6% influenced, mainly, by the production of capital goods of mixed use (16.3%), in which stand out the items associated to computer equipment and mobile telephony (mobile telephony transmitters and receivers).  It can also be pointed out, due to the value of the rate, the subsectors of capital goods for electricity (42.1%) and capital goods for construction (19.9%).  The production of semi-durable and non-durable consumer goods increased by 3.0% in the two first months of the year, showing the favorable performance of the subsectors food products and elaborated beverages for domestic use (4.1%) and of other non-durable goods (3.0%). Intermediate goods increased by 2.7%, supported mainly by the performance of basic industrial inputs (18.1%), fuels and basic lubricants (14.9%) and  elaborated industrial inputs (0.8%), with increases in the items iron ore, petroleum and rolled stell products, respectively.  Still with impacts in the production of intermediate goods, stood out the favorable performance of construction inputs, with increase of 7.0%, and the sector of packaging (1.6%).

Among the 76 surveyed subsectors, 46 increased in the period January-February 06/ January-February 05.  Stood out the results of some subsectors more related to exports, mainly of commodities: petroleum extraction and natural gas (13.6%), extraction of iron ores (17.1%) and cellulose and pastes for the manufacturing of paper (6.3%).  There are also elevated indexes in the manufacturing subsectors of durable consumer goods, as for example: household appliances such as TV equipment, radio and stereo (43.0%),  electronic material and communication equipment (11.5%) and automobiles, vans and jeeps (13.7%).  Among the decreases, stand out: fruit juice and concentrates (-31.9%), manufacturing and refining of sugar (-24.0%), footwear (-5.0%), alcohol (-37.4%), agriculture machines, equipment and tractors (-19.0%), trucks and buses including motors (-11.9%) and construction of railway waggon (-17.2%).

Industry maintains, in these first two months (4.2%), a growing rhythm above the one indicated in the last quarter of 2005 (1.3%), compared to the same period of the previous year. This trend was followed by all the categories of use, being more intense in the sector of durable consumer goods (from 4.9% to 16.6%).

In synthesis, the indexes of industrial activity show that in the beginning of 2006 compared to the first two months of 2005, the rates continue positive and are growing. The  recent evolution of the quarterly moving average index is also positive, accumulating growth of 2.8% between November and February, a trend also observed in the four categories of use, especially durable consumer goods (16.6%) and semi-durable and non-durable consumer goods (4.2%). The more favorable credit conditions, the increase of the overall wages and the fall of inflation are factors which influenced this performance. Stands out also, the sustaining of positive results in the foreign sales, which impacted mainly the productive sector of commodities, but also some areas of consumer goods, especially durable consumer goods. In capital goods, which in this period increased 5.0%, significant increases were observed in the sectors related to infrastructure (capital goods for electricity and capital goods for construction), and also in capital goods for mixed use, where stood out the items related to computer equipment and mobile telephony.