In July, the industrial production indexes registered an increase of 0.5% compared to the previous month, in the seasonally adjusted series. The industrial sector has been growing since March in this type of comparison, having accrued an increase of 6.1% between February and July 2004. Compared to July 2003, the increase in the industry's global production reaches 9.6%, being that growth rates for this indicator have been positive since September 2003. With the result of July, the accrued rate for the last seven months registered at 7.8%, therefore above the result of the first semester (7.5%). The favorable behavior of industrial activity during the last months has caused the accrued index of the last twelve months to continue in growing trend, passing from 3.9% in June to 5.0% in July.

The 0.5% growth that was registered from June to July reflects the increase of production in 16 out of 23 activities that have seasonnaly-adjusted series. Positive highlights include automotive vehicles (5.4%), metal products (7.0%), tobacco (24.2%) and beverages (4.9%). The activities with most significant decreases were: pharmaceuticals (-6.3%), other chemical products (-1.3%) and other transport equipment (-6.1%).

In the same comparison between July 2004 and June 2004, the category indicators demonstrate growth rates for intermediate goods (2.3%) and for durable consumer goods (1.1%), while capital goods (-1.1%) and semi-durable and non-durable consumer goods (-1.0%) registered decreases. The production in the intermediate goods segment registered its highest growth rate in this type of comparison, exceeding the 2.0% that were registered in May. The durable consumer goods segment maintained a positive rate (1.1%), although it was lower than the rhythm of the three previous months (3.7% on average). The decrease of 1.1% registered in the capital goods sector interrupted a four-month sequence of growth, a period in which the sector accrued a growth of 9.9% (June 2004/February 2004). The same trend holds for the semi-durable and non-durable consumer goods sector, that, after growing 2.3% between March and June of this year, decreased 1.0% in July.

The evolution of the quarterly moving average indicators remained positive for the industry's total and for the four categories of use. In this index it is noted that between July 2003 (month in which it reached its lowest level in recent times) and July 2004, the industry grew 11.0%, with the categories of use registering the following results: capital goods (29.7%), intermediate goods (9.7%), durable consumer goods (30.6%) and semi-durable and non-durable consumer goods (4,4%).

These numbers prove the dynamism of the recent evolution for durable consumer goods, mainly supported by the improvement of credit conditions that was noted between the second semester of 2003 and the first semester of this year, and of capital goods, driven by an increase in the production rhythm of various of its production sub-sectors. The intermediate goods industry has been positively impacted by exports, by the favorable performance of agroindustry and, more recently, by the increase in production rhythm of sectors that are typically aimed at serving domestic demand. The production of semi-durable and non-durable consumer goods, which is more sensitive to the evolution earnings, registered a much more moderate rhythm of recovery.

Monthly indicator (July 2004 / July 2003)

The 9.6% result in the monthly indicator, one of the highest rates of the year, is a reflection of growth in 24 out of 27 surveyed sectors. The automotive vehicle industry (39.5%) remained as the greatest positive impact on the formation of the global rate, followed by machines and equipment (21.8%) and tobacco (171.0%). It should be noted that this last activity had its result impacted not only by the increase of the tobacco harvest of this year, as with the base of comparison, since, due to climatic problems in 2003, the harvest for that year ended in June. In these three industries, the most notable items included, respectively: automobiles, domestic refrigerators and tobacco products. The three activities that registered decreases compared to June 2003 are, in order of importance: pharmaceuticals (-17.5%), oil refining and alcohol production (-3.5%) and publishing and printing (-6.9%).

Still in the same comparison of July 2004 with July 2003, the category of use indicators conformed the general profile of positive results for industrial production, with the four categories registering growth in this period. Durable consumer goods (27.3%), capital goods (23.9%) and intermediate goods (9.9%), remained above the global average (9.6%), while semi-durable and non-durable consumer goods registered a rate of 3.2%. It should be noted that, in this month, the evolution rhythm of intermediate goods (9.9%) exceeded the global average (9.6%), which did not take place since last March. In addition to the influence of the tobacco harvest in 2004, this sector was positively influenced by the increases observed in inputs for civil construction (9.3%), auto parts (29.5%) and packaging (4.3%).

Accrued year

In the accrued period between January-July, compared to the same period of 2003, the industry's total growth was of 7.8%, with 23 activities registering an increase in production. Vehicle manufacturing (28.0%) maintained its leadership among activities, in terms of impact on the global index. Other relevant positive contributions were made by machines and equipment (16.9%), electronic and communications equipment (30.7%) and other chemical products (7.2%). On the other hand, among the four industries that registered decreases, the most significant were pharmaceuticals (-11.2%) and publishing and printing (-1.8%). By categories of use, the capital goods (24.9%) and durable consumer goods (22.5%) segments led growth, while intermediate goods (6.8%) and semi-durable and non-durable consumer goods (2.0%) remained below the industry's average. Several capital goods segments had positive performances, which indicates a more generalized investment recovery movement. The production of machines and equipment for industrial purposes grew 15.0% in the accrued year. Among the other sub-sectors, the results are as follows: 16.5% for agricultural capital goods, 32.3% for construction, 12.9% for the electric energy sector, 25.2% for the transport sector and 26.6% for mixed use capital goods.