In January of 2011, in the seasonally adjusted series, the industrial output continues recording a slow pace of production...

In January of 2011, in the seasonally adjusted series, the industrial output continues recording a slow pace of production. That is represented by the slight advance of 0.2% in the January 2011/December 2010 comparison, after a contraction of 0.8% in the previous month and of 0.1% in November. On a month-to-month basis, the overall industrial output recorded an increase of 2.5%, repeating the result of last December and pointing to positive results, but with lower rates than in the previous months.

As a result, the index accumulated in the last twelve months continued its upward trend, but with a reduction in the pace of growth in the last months: 9.4% in January, against 10.4% in December, 11.7% in November and 11.8% in October.

Industrial Output Indicators – Brazil – January of 2011

Source: IBGE, Directorate of Surveys, Coordination of Industry

Among the sectors, 15 recorded a high and 12 a drop

The increase in production between December and January was sustained by the expansion in 15 of the 27 sectors surveyed and reached three of the four categories of use.

Among the sectors that recorded a growth, the most important performances for the overall result were from electronic material and communication equipment (the expansion of 35.5% was attributable to the return from collective vacation) primary metallurgy (5.3%) and pharmaceutical (5.4%). It is worth highlighting the contraction of these sectors in December: -17.0%, -4.9% and 2.1%, respectively. Other relevant positive contributions to the overall industry came from machines and equipment (1.9%), metal products (2.9%) and food (0.8%). Among the activities that registered a reduction in production between December and January, the highlights were: motor vehicles (-3.2%), which accumulated a loss of 4.0% in the last three months; petroleum refinement and alcohol production (-2.3%), non-metallic minerals (-2.8%) and beverages (-2.4%).

Also compared with December of 2010, regarding the categories of use, the indexes were positive for durable consumer goods (6.0%), capital goods (1.8%) and semi- and non-durable consumer goods (0.3%). Conversely, the production of intermediate goods (-0.4%) recorded the second negative result in that type of comparison. The advance of 6.0% in the manufacturing of durable consumer goods was registered after two consecutive months of negative rates, which pushed the category 0.7% below the record level reached in June of 2008. The category of capital goods, by growing 1.8%, eliminated the contraction of 0.8% recorded in December. Conversely, the increase of 0.3% in semi- and non- consumer goods interrupted three negative consecutive months, when it accumulated a loss of 1.3%.

Quarterly moving average changed –0.2%.

In the evolution of the quarterly moving average index, the overall industry recorded a negative change of 0.2% between December and January, repeating the result of the previous month, after remaining stable between September and November. Among the categories of use, durable consumer goods (1.8%) and capital goods (1.4%) recorded the highest increases and continued the upward trend started in August and October, respectively. Intermediate goods continued to register a slight positive change for the third consecutive month: 0.2% in November and December and 0.1% in January. Semi- and non-durable consumer goods (-0.2%) recorded the second consecutive negative result, accumulating a loss of 0.7% in both months.

Compared with January/2010, motor vehicles led growth

Compared with January of 2010, the industrial sector increased by 2.5%, the fifteenth consecutive positive rate in that type of comparison, with expansions in 19 of the 27 activities surveyed. It is worth mentioning that January of 2011 had one more working day in comparison with January of 2010. Motor vehicles, which advanced 8.2%, was the highest impact on the overall rate, followed by machines and equipment (7.0%), mining and quarrying industry (5.5%), other transportation equipment (11.8%), office machines and computer equipment (14.8%) and pharmaceutical (7.4%). In these sectors, the highlights were: automobiles and trucks; air-conditioners, motor graders and forklift trucks; iron ores, petroleum and natural gas; motorcycles and airplanes; automatic teller machines and computer parts and accessories; and medicines. Among the eight sectors recording a decrease, the main pressures on the industrial average came from textile (-11.6%), beverages (-4.5%), metal products (-5.1%) and petroleum refinement and alcohol production (-2.3%). The contributing factors were, respectively, decreases in the manufacturing of cotton fabric and of bath, face and hand towels; syrup and powder preparations for the elaboration of beverages; parts and accessories for capital goods; and diesel oil, alcohol and naphta for the petrochemical industry.

Among the categories of use, compared with January of 2010, the results were positive. Capital goods (9.1%) and durable consumer goods (6.1%) registered a quite superior pace in relation to the overall industry (2.5%); whereas intermediate goods (0.9%) and semi- and non-durable consumer goods (0.8%) recorded more moderate advances.

Capital goods

recorded the highest expansion among the categories of use, propelled by the growth in most of its subsectors. The highlights were capital goods for transportation (8.4%), for mixed use (9.8%), for construction (23.6%) and for industrial purposes (6.4%). The production of durable consumer goods also increased above the overall average and was positively influenced by the advances in automobile manufacturing (5.9%), cell phones (25.8%) and motorcycles (44.9%). In this category of use, it is worth mentioning the negative pressure from house appliances (-5.9%), mainly attributable to the contraction of 26.8% registered for "brown-line" house appliances. The "white-line" goods recorded a slight positive change (0.5%).

Compared with January of 2010, intermediate goods (0.9%) and semi- and non-durable consumer goods (0.8%) advanced below the overall industry. In the first category, the positive influences came from mining and quarrying industry (5.6%), motor vehicles (7.8%), non-metallic minerals (3.5%), rubber and plastic (3.4%), food (2.2%) and cellulose and paper (1.4%). The main negative pressures were observed for petroleum refinement and alcohol production (-4.1%), textile (-8.3%) and metal products (-6.8%). In that category of use, the maintenance of the positive results for producer goods for civil construction (6.5%) and packaging (6.1%) is also relevant. The positive performance of semi- and non-durable consumer goods was mainly due to the advances in other non-durable goods (5.2%) and fuels (1.9%). Conversely, semi-durable goods (-8.9%) and food and beverages elaborated for domestic consumption (-0.6%) recorded negative rates.

The pace of the overall industry production in January of 2011 (2.5%) was slightly below the index for the fourth quarter of 2010 (3.2%), both comparisons against the same period of the previous year. That movement was observed in most (15) of the 27 sectors surveyed and in two of the four categories of use. Among those, the loss in pace was observed for intermediate goods, which recorded an increase of 3.9% in the last quarter of 2010 and changed to 0.9% in January, and for semi- and non-durable consumer goods (from 1.6% to 0.8%). Conversely, durable consumer goods (from 1.5% to 6.1%) and capital goods (from 7.0% to 9.1%) recorded a higher dynamism between the fourth quarter of last year and the first month of 2011.