July indexes confirmed the increase of industrial activity. The sector grew by 1.2% from May to June (seasonally adjusted series).

July indexes confirmed the increase of industrial activity. The sector grew by 1.2% from May to June (seasonally adjusted series). It was the ninth consecutive increase in this type of comparison, which resulted in accumulated increase of 6.8% between September 2006 and June 2007. Compared to June 2006, there was increase of 6.6%, the highest since December 2004 (8.3%); this result was obtained despite the shorter year, with one day less. The indicator accumulated in the first semester of the year reached 4.8%. The annualized rate – accumulated in the last 12 months – (3.9%) had acceleration compared to the May result (3.3%).

This growth of industry is in accordance with the evolution of the latest statistics of retail trade, of the job market and of the performance of the agriculture sector.

The indexes for the second semester of 2007 were also positive, both in comparison with the equivalent period in 2006 (5.8%) and in relation to the immediately previous quarter (2.5%) – with seasonal adjustment. In this type of comparison, the rate of 2.5% was the highest since the third quarter of 2004 (2.6%); general industry had its seventh consecutive quarter with positive rates, which resulted in increase of 8.3% in this period. The overall industrial production grew especially due to the performance of capital goods, whose production was above average, with 21.7% accumulated in these quarters. It was followed by durable consumer goods (12.1%), semi-durable and non-durable consumer goods (7.5%) and intermediate goods (6.4%).

Eighteen of the twenty-three industrial subsectors grew from May to June

Most of (18) the 23 industrial subsectors with seasonally adjusted series, grew between May and June 2007. Considering the subsectors which determined the overall positive performance, the highlights were: petroleum refining and alcohol production (3.6%), pharmaceutical products (6.7%), automotive vehicles (1.2%), metallurgy (1.7%), cellulose and paper (3.4%) and metal products (3.4%). The main negative contributions came from food products (-0.7%), beverages (-1.0%) and tobacco (-5.7%).

In the analysis by category of use, still in comparison with May, the indexes were positive, especially those of consumer goods, both semi-durable and non-durable consumer goods (2.5%) and durable goods (2.2%), followed by capital goods (1.2%) and intermediate goods (0.8%).

The segment of consumer semi-durable and non-durable consumer goods had the third positive consecutive rate, having accumulated, between March and June this year, increase of 4.8%. The growth of the category of durable consumer goods occurred after increase of 1.6% in May. Capital goods and intermediate goods also reached the second consecutive positive rate, having accumulated, respectively, 6.4% and 1.6% in these two months.

The acceleration of the production in all the categories of use in June maintained the positive trend of the quarterly moving average index (trend indicator), which showed change of 0.9% in industry between June and May. In the analysis by category of use, capital goods (1.9%) had clear acceleration in this same comparison, being followed by semi-durable and non-durable consumer goods (1.6%). Durable consumer goods (0.9%) and intermediate goods (0.3%) also had increase.

In comparison with July 2006, most (22) of the 27 subsectors surveyed had positive indexes. Machinery and equipment (20.6%) continued being the highest positive impact on the formation of the overall rate, being followed by automotive vehicles (12.9%), other chemical products (10.8%), mining and quarrying (8.5%) and metallurgy (7.6%). Among the five falling activities in relation to June 2006, the highlights were tobacco (-12.6%) and electronic material and communication equipment (-4.0%).

Among the categories of use, capital goods (17.4%) was the leader, followed by durable consumer goods (7.7%), semi-durable and non-durable consumer goods (5.4%) and intermediate goods (5.3%).

Industry grows at higher rate in the second quarter

In the second quarter of 2007, industrial activity increased by 5.8% at a higher rate than in the first quarter (3.8%); both comparisons were made versus the equivalent period in the previous year. This acceleration was observed in all the categories of use.

Among capital goods, whose rate changed from 14.8%, in the first quarter, to 18.5%, in the second, this behavior was observed in most of the subsectors, especially in machinery and equipment for industrial use (from 15.9% to 25.4%); agricultural machinery and equipment (from 13.1% to 52.6%); machinery and equipment for construction (from 6.6% to 19.8%); and for transportation (from 9.5% to 14.5%). Capital goods for mixed use (from 18.3% to 13.4%), even having faced reduction of the growth rhythm between the two quarters, kept its two-digit increase.

In terms of durable consumer goods (from 2.3% to 6.3%), the acceleration was particularly affected by automobiles, whose rise changed from 1.0% in the first quarter, to 9.5% in the second. In the sector of semi-durable and non-durable consumer goods (from 1.3% to 4.5%), the acceleration was based on the performance of fuels (from 0.4% in the first quarter to 7.0% in the second), as a result of the higher offer of alcohol and gasoline; and on the performance of semi-durable goods (from -4.6% to 3.7%) and of other non-durable goods (from 0.0% to 3.9%). Finally, in terms of the growth of intermediate goods (from 3.8% to 4.4%), the highlight was elaborated industrial inputs (from 3.3% to 4.6%).

Machinery and equipment are the highlights in the first semester of 2007

In the first semester of 2007, compared to the equivalent period in 2006, the overall increase of industrial production (4.8%) resulted in a predominance of positive rates, which reached 20 of the 27 activities surveyed. The main contribution came from machinery and equipment (17.5%), in which there was increase in approximately 80% of the 81 products surveyed.  

It is also worth mentioning the positive performances of automotive vehicles (8.9%), metallurgy (8.2%), food products (3.3%), office machines and computer equipment (21.2%), other chemical products (5.3%) and mining and quarrying industry (5.7%).

The indexes by category of use confirmed the pattern of growth throughout the year, with more dynamism of the sector of capital goods (16.7%), which has had two-digit increases since the beginning of 2007. The period of increase of internal demand, which is mainly based on the increase of occupation, on the reduced inflation and on the continuation of credit offers, has favored investments in industry and in other sectors, as reflected in the dynamics of the capital goods segment.

The remaining categories had indexes below the average of industry. Durable consumer goods had a rate of 4.4%, with increase of 5.3% in the production of automobiles and of 13.3% in the case of non-potable and portable household articles for domestic use, such as refrigerators, washing machines and others. The production of sound systems, televisions and related-household appliances (-20.9%) and of cell phones (-6.2%) were negative contributions.   

Intermediate goods had increase of 4.1%, being the main highlight elaborated industrial inputs (4.0%), the highest impact in this category, as a consequence of the bigger production of steel and car pieces. The group of industrial inputs for construction, which accumulates increase of 6.1% in the first quarter of the year, also contributed t the positive performance of this segment. The subsector of elaborate fuels and lubricants (-2.4%) was the only falling one, as a result of the reduced production of diesel and lubricant oils. 

The industry of semi-durable and non-durable consumer goods (2.9%) had its result  mainly affected by elaborated food products and beverages (4.5%), in which the main highlights were the items meats and chicken giblets.