In December 2009, the Brazilian industrial production changed by -0.3% compared to the figure in the previous year, in the seasonally adjusted series. It was the second negative result in this type of comparison, leading to change of 1.2% between October and November.

In relation to December 2008, there was increase of 18.9%, reflecting, to a great extent, a more reduced basis for comparison in relation to that in November (when there was increase of 5.2%), due to the effects of the financial world crisis. 

As a result, production in the 4th quarter of 2009 increased 5.8% compared to the same period in 2008, inverting the sequence of four quarters with negative rates in this comparison; and the indicator for closing the year was -7.4%, reducing by 1.9 percentage points the decrease observed until November. Even so, this month marked the biggest decrease since 1990 (-8.9%).  

With a rate of -0.3% from November to December (after decrease of 0.8% in the previous month), the level of industrial production got closer to that of 2007. This result was affected by the bigger concentration of sectors which had increase (18) rather than decrease of production (9).

Among the subsectors with decreasing results, the main contribution came from electronic material and communication equipment (-12.2%). In other positions were automotive vehicles (-1.2%), food products (-1.0%), textiles (-4.0%) and other transportation equipment (-4.2%). On the other hand, metal products (11.3%), pharmaceutical articles (6.2%), electric machines, appliances and equipment (3.3%) and other chemical products (1.3%) accounted for the main positive results.

Also in comparison with November 2009, some categories of use kept positive results: intermediate goods (1.0%), which increased for the twelfth consecutive month, having accumulated expansion of   19.7%, and  capital goods (0.3%), with increase of 29.3% between March and December last year. Semi-durable and non-durable consumer goods had positive rates once again (0.4%), after having decreased 0.5% in the previous month. Durable consumer goods (-4.9%) were the only ones with falling rates, for the second consecutive month, pointing to stabilization after having increased throughout 2009. This category was mainly affected by fiscal incentives to automobiles and electronic appliances of the “white type”¹. 

The negative result of December contributed to the reduction of the pace of increase of the quarterly moving average, which rose 0.5% between November and December, the  lowest gain in the last ten months. Durable consumer goods interrupted a sequence of tem consecutive months, pointing to the only negative rate: (-1.0%); capital gods (3.6%) and intermediate goods (1.4%) had the biggest increases; semi-durable and non-durable consumer goods (0.4%) practically repeated the same rate as in the previous month.

In relation to December 2008, 22 of the 27 industrial subsectors increased

In relation to December 2008, the increase of the industrial sector (18.9%) resulted from the increase of production in 22 of the 27 subsectors. The main highlights were automotive vehicles (129.6%), followed by machinery and equipment (33.9%), other chemical products (20.7%), rubber and plastic (48.8%) and mining and quarrying industry (19.1%). Although there has been widespread recovery among the subsectors, this change was most significant in the subsectors which are sensitive to credit restrictions, (mainly the car segment). Another reason was the reduced exports of commodities, which, in December 2008 had led to collective vacations in companies due to non-programmed interruption of production, in order to promote stock adjustment.

Recovery is observed by the increase of the group of products with positive rates: the diffusion index shows that 66% of the 755 products investigated had whose production increased. On the other hand, the main negative contribution came from other transportation equipment (-24.9%), mainly affected by the smaller production of airplanes.

Also in comparison with results in December 2008, all the categories of use had positive rates. The highlight was durable consumer goods (72.1%), which were mainly affected by a bigger production of cars (164.7%) and electronic appliances (45.2%), both of the “white type” (50.2%) and of the “brown one”² (41.0%).

The production of capital goods (23.0%) had overall increase; the highlights were the advances in capital goods for mixed use (40.2%), for transportation, (24.5%) and for industrial use (18.2%). In this category of use, the only negative result was that of the subsector capital goods for electricity (-29.7%). In intermediate goods (21.0%), the main positive contributions came from products associated to the production of automotive vehicles (106.5%), metallurgy (25.1%), rubber and plastic (50.2%) and other chemical products (20.7%). Other highlights were inputs for construction (12.2%) and packaging (17.8%).

In terms of production, semi-durable and non-durable consumer goods increased 6.0%, being below the average and positively affected by the groups of non-durable goods (9.9%), food products and beverages for domestic consumption (5.0%) and semi-durable and non-durable goods (8.9%). The fall of 4.6% in the subsector of fuels, due to reduction of alcohol production, also contributed to the reduced increase of this subsector.

Industry recovers increase in the last quarter of 2009

By analyzing production ROM a quarterly perspective, in relation to the same period in the previous year, it was possible to observe that throughout 2009, there were decreasing negative rates up to the third quarter: -14.6% from January to March; -12.3% from April to June and -8.2% from July to September.

However, in the last quarter of the year, industry interrupted a sequence of falling rates and increased  5.8%.

The production of durable consumer goods had the biggest increase in the last three months of the year (25.0%), being followed by intermediate goods (6.7%) and semi-durable and non-durable consumer goods (2.2%). The production of capital goods (-1.6%), in spite of significant reduction in the rhythm of increase, was the only category of use to keep a negative performance in this comparison.

In the seasonally-adjusted series, signs of recovery in 2009 were also present in the advance of 3.6 in the fourth quarter over the immediately previous quarter. It was the third consecutive increase in this type of comparison, a period in which the industrial sector accumulated increase of 13.0%.                                                  

Capital goods had the most significant acceleration from the third (6.9%) to the fourth quarter (13.3%), followed by semi-durable and non-durable consumer goods (from 0.6% to 1.4%). The sector of intermediate goods practically kept the same rhythm of production between both periods (from 4.6% to 4.5%), whereas durable consumer goods faced reduction in the pace of increase (from 9.0% to 2.6%).

In 2009, industry faced major fall since 1980

 In the year 2009, the industrial sector faced its major decrease (-7.4%) compared to the figure in the same year since 1990 (-8.9%). The first semester brought more significant decrease (-13.4%) than second one (-1.7%) considering both figures versus those in the same period in the previous year, mainly due to the acceleration of industrial activity in the last quarter (5.8%). In the year, there was an overall profile of decrease, with decrease of production of all categories of use and 23 of the 27 subsectors surveyed. Results accumulated in 2009 reflect, to a great extent, the losses in investments, caused by the lack of confidence of economic agents and the steep fall of international demand.

Among the activities facing the most significant decreases were: machinery and equipment (-18.5%), automotive vehicles (-12.4%), metallurgy (-17.5%) and electronic material and communication equipment (-25.5%).

By category of use, the most significant decrease came from the subsector of capital goods (-17.4%), followed by intermediate goods (-8.8%). The categories of consumer goods, both durable (-6.4%) and semi-durable and non-durable (-1.6%), closed the year with less significant decreases than the average.  

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¹ Refrigerators and freezers; stoves; washing machines and clothes dryers.

² Television sets, radio and DVD players.