From February to March, the seasonally adjusted indicator of industrial activity had positive change of 0.4%, after having decreased by 0.5% in the previous month. In relation to March 2007, the increase was 1.3%. The first quarter of 2008 ended with an increase rate of 6.3%, compared to that of the same period in the previous year. March indexes show a positive scenario for industrial activity, characterized, however, by a lower rhythm of increase: in comparison with the immediately previous quarter, industrial production has grown for ten consecutive periods. Nevertheless, it faced significant reduction of the rhythm of increase by reaching 0.4% in the first quarter this year, compared to the last quarter in 2007 (1.9%). The indicator accumulated in the last twelve months (6.6%) has faced deceleration in relation to February (6.9%),

interrupting the increases which had been observed since March 2007.

The increase of 0.4% from February to March occurred in 17 of the 27 subsectors surveyed. Among the highlights were pharmaceutical industry (16.0%), which recovered part of the loss of 27.2% of the previous year, automotive vehicles (1.6%), editing and printing (2.4%), non-metallic minerals (2.3%) and metallurgy (1.2%). The most significant decrease was that of petroleum refining and alcohol production (-11.0%), a result which reflects the technical halt of activities in an important company of the sector. It is also worth mentioning the negative contributions from mining and quarrying industry (-3.5%), food products (-1.6%), other chemical products (-1.6%) and office machines and computer equipment (-5.8%), with decrease of 28.9% in this last one, its fifth consecutive decrease.

In the analysis by category of use, consumer goods had the highest rates between February and March: durable consumer goods and semi-durable and non-durable consumer goods (1.7%). The first sector recovered part of the decrease registered in the previous month (-3.6%) and the second had accumulated increase of 9.0%, in its third consecutive increase. Capital goods (0.9%) remained increasing production, whereas intermediate goods (-0.9%) decreased for the second consecutive month, having accumulated loss of 1.6% in this period.

In the comparison March 2008/March 2007, the sector had increase of 1.3%, a figure extremely lower than those observed in the last few months. This decrease of the rhythm of the monthly index may be understood as resulting from: the non-occurrence of two business days in March 2008 compared to March 2007, the significant decrease of petroleum refining and alcohol production, and, at a lower extent, the difficulties in the transportation of raw material for industrial consumption, due to the strike of Receita Federal (Brazilian Federal Revenue), which started on March 18. The reduced rhythm is also confirmed by the dissemination index (percentage of products on an upward trend), which, after reaching 65.5% in February, fell to 44.1% in March, and reached its lowest level since April 2006 (40.0%).

Also in comparison with March last year, 14 of the 27 subsectors surveyed faced increase of production, being the highlights, in order of importance to the overall index: automotive vehicles (11.3%), machinery and equipment (6.6%), other transportation equipment (22.5%) and metallurgy (5.5%). In these activities, the main items were, respectively: cars ad trucks; lifting equipment for transportation of goods and machining centers; planes and motorcycles; and steel and iron-niobium ingots and blocks. Almost half (13) of the 27 subsectors surveyed faced decrease compared to March 2007; the main item, in this case, was petroleum refining and alcohol production (-8.7%), due to the interruption of activities which affected the production of diesel and gasoline. Other highlights with falling rates were: office machines and computer equipment (-16.9%), food products (-2.6%) and beverages (-6.9%).

Among the categories of use, capital goods reached, once more, the highest rate (12.7%); the production of durable consumer goods was 6.5% above that of March last year. The sector producing intermediate goods (0.3%) reached a period of 21 months with positive rates, but had, however, the lowest index since June 2006 (-0.4%), whereas semi-durable and non-durable consumer goods had the only positive result among the categories of use, after a sequence of 14 positive rates.

The good performance of capital goods was maintained by all its subsectors. The ones above the average for this category (12.7%) were capital goods for agriculture (34.9%) and for transportation (18.8%). However, it is also worth mentioning production of machinery and equipment for industrial use (10.9%), confirming the high investments. Production of durable consumer goods reflected advance in the car industry (13.7%) and the positive behavior of the item cell phones (20.1%). The item household appliances remained practically stable.

Among intermediate goods, the highlights were the increase in: items from the metallurgy subsector (5.5%), automotive vehicles (5.7%), mining and quarrying industry (3.0%), cellulose and paper (3.1%) and non-metallic minerals (3.5%). It is also worth mentioning the positive performance of inputs for construction (5.4%). Even so, the overall result for the category was close to stability (0.3%), influenced, above all, by the negative pressure from the subsector of petroleum refining and alcohol production (-9.9%), a result which reflected the aforementioned technical halt of activities in March this year. The production of semi-durable and non-durable consumer goods was negatively affected by all its subsectors, especially food products and beverages for domestic use (-4.7%), which accounted for the main negative contribution to the overall index for this category, due to the items: beer and draft beer; and meat and poultry giblets. It is also worth mentioning other durable consumer goods (-1.9%) and fuels (-5.4%); the latter, in fact, contributed to the decrease of gasoline.  

On a quarterly basis, there was deceleration of the rhythm of increase of industrial activity from the last quarter of 2007 (7.9%) to the first quarter of 2008 (6.3%), being both comparisons made versus the same period in the previous year. In this same comparison, by category of use, only durable consumer good maintained the same rhythm between the two quarters (from 13.4% to 13.6%). In spite of some decrease of rhythm, capital goods (from 24.0% to 17.1%) had the biggest increase and was extremely above the average of industry. Intermediate goods changed from 6.8% to 6.0% and semi-durable and non-durable consumer goods had the biggest decrease, having changed from 4.1% to 1.2%.

The increase of 6.3% of industrial production in this first quarter, compared to the same period in the pervious year, reached most of (20) of the 27 sbsectors surveyed. Automotive vehicles (19.4%) kept the leadership in terms of influence on th overall index, with car and truck production the main highlight. Other positive contributions came from machinery and equipment 911.4%), chemical products (9.5%), other transportation equipment (27.3%) and metallurgy (7.8%). On the other hand, among the seven decreasing subsectors, the main contributions came from office machines and communication equipment (-12.0%) and pharmaceutical industry (-4.9%).

In comparison with the immediately previous quarter, industrial production had significant decrease in the rhythm of growth, by reaching rates of 0.4% in the first quarter, versus the last quarter of 2007 (1.9%). This reduction reached all the categories of use, except durable consumer goods (from 0.5% to 5.9%). Capital goods (from 5.8% to 3.4%) and intermediate goods (from 1.7% to 1.1%) faced decrease of rhythm, but even so, managed to increase above the average rate of industry in the first quarter of the year, whereas semi-durable and non-durable consumer goods faced deceleration and decrease (from 0.6% to -0.9%).