Output of industry increases 8.9% in June 2020

August 04, 2020 09h00 AM | Last Updated: August 05, 2020 01h44 PM

In June 2020, industry output increased 8.9% against May 2020 (seasonally adjusted series), with an increase versus that in the previous month (8.2%). The two months recording expansion counterbalanced part of the 26.6% loss of March and April, at the lowest level of the series. 

June 2020 / May 2020 8.9%
June 2020 / June 2019 -9.0%
Cumulative in the year -10.9%
Cumulative in 12 months  -5.6%
Quarterly moving average  -1.8%

Against June 2019 (series without seasonal adjustment), industry contracted 9.0%, having recorded the eighth negative result in a row in this comparison. So, industry indexes were negative both against the end of Q2 2020 (-19.4%), and in terms of the cumulative figure for the first half of the year (-10.9%). In 12 months, there was a 5.6% decrease, the highest since December 2016 (-6.4%). The complete publication for the Monthly Survey of Industry (PIM) is on the right of the page. 

Brazil - June 2020
Industry Output Indicators by Major Economic Categories
Major Economic Categories  Change (%)
June 2020/
May 2020*
June 2020/
June 2019
Cumulative
January-June
Cumulative Last 12 Months
Capital Goods 13.1 -22.2 -21.2 -11.0
Intermediate Goods 4.9 -5.9 -6.6 -4.2
Consumer Goods 15.9 -11.6 -16.2 -6.8
Durable 82.2 -35.1 -36.8 -16.9
Semi-durable and Non-durable  6.4 -5.6 -10.3 -4.0
General Industry 8.9 -9.0 -10.9 -5.6
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria
*Seasonally adjusted series 

Industrial activity grew 8.9% in June 2020, recording its highest rate since June 2018 (12.5%), and a decrease for the second month in a row. In spite of that, the output of industry eliminated only part of the 26.6% decrease in March-April 2020. The result of June reflected a widespread positive behavior, due to an increase in the production pace after the advance of interruptions in several industrial plants, in March and April, due to the COVID-19 pandemic.

Despite the more positive performance this month, industry is still 27.7% below the record level reached in May 2011. Also in the seasonally adjusted series, the quarterly moving average remained on a downward trend, with the industry overall recording a decrease of 1.8% in June 2020, against the May figure, being, that way, on a predominantly downward trend since October 2019.

Output advanced in all the economic categories and in 24 of the 26 subsectors

The advance of output by 8.9% from May to June 2020 had a widespread increase, observed in all the major economic categories and in most of (24) the 26 subsectors surveyed. Among the activities, the most relevant positive result was that of motor vehicles, trailers and bodies, which increased 70.0%, due to the restart of production at plants formerly closed due to the COVID-19 pandemic.

With these results, motor vehicles, trailers and bodies had a cumulative increase of 495.2% in two consecutive months, being still 53.7% below the level of last February.

Other relevant positive contributions to the industry overall came from beverages (19.3%), mining and quarrying industry (5.5%), rubber products and plastic material (17.3%), other transportation equipment (141.9%), non-metallic mineral products (16.6%), electric machines, appliances and equipment (24.4%), machinery and equipment (10.6%), metal products (13.1%), textiles (34.2%), computer, electronic and optical material (15.1%), printing and reproduction of recorded media (63.4%) and furniture (28.5%).

On the other hand, both negative results in the month came from the subsectors of coke, petroleum products and biofuels, both recording a decrease of 1.8%. The former eliminated part of the 3.5% cumulative gain in the months of April and May and the latter fell once more, after an increase of 16.3% last May, interrupting a series of three consecutive months of contraction in output and having a cumulative decrease of 20.1%.

Among the major economic categories, also against May 2020, durable consumer goods, up 82.2%, and capital goods (13.1%) recorded the highest positive rates in June 2020, both indicating the second month of expansion in a row, with cumulative advances of 287.4% and 47.3% in the period, respectively. It is worth mentioning that, despite these positive results, the segments are still quite below the level of last February: -40.1% and -27.1%.

Producers of semi-durable and non-durable consumer goods (6.4%) and of intermediate goods (4.9%) also recorded positive rates in June 2020, with both segments advancing below the average of industry (8.9%), but registering increase for the second month in a row and cumulative increases of 17.7% and 10.7% in the period.

Quarterly moving average down 1.8%

Also in the seasonally adjusted series, the quarterly moving average for the industry overall fell 1.8% in the quarter ended June 2020 against the previous month. That way, it maintained the predominantly downward trend initiated October 2019.

Among the major economic categories, also in terms of the quarterly moving average, durable consumer goods (-13.2%) recorded the most significant decrease in the month, maintaining the negative behavior since December 2019, a period when there was a decrease of 64.7%. The segments of capital goods (-5.8%) and of intermediate goods (-2.2%) also fell in June and remained on a downward trend as of February 2020.

Producers of semi-durable and non-durable consumer goods (1.0%) recorded its only increase in June 2020 and interrupted, that way, the sequence of negative results observed since December 2019, a period when there was loss of 18.3%.

Industry fell 9.0% against June 2019

Against the same month in 2019, the industrial sector fell 9.0% in June 2020, with negative results in the four major economic categories, 21 of the 26 subsectors, 55 of the 79 groups and 62.5% of the 805 products surveyed. Despite the positive calendar effect - June 2020 (21 days) had two days less than June 2019 (19) -, the pace of industrial production is less intense, also influenced by the effects of social isolation.

Among the activities, motor vehicles, trailers and bodies (-51.6%) accounted for the most significant negative influence on the formation of the average of industry, due, to a great extent, to the items cars, trucks, pieces, tractor-trucks for trailers and semi-trailers, and vehicles for the transportation of goods.

It is worth highligting the negative contributions of the following subsectors: basic metals (-25.3%), manufacture of wearing apparel and accessories (-46.8%), machinery and equipment (-19.7%), leather, travel articles and footwear (-44.7%), textiles (-23.7%), rubber products and plastic material (-9.7%), other chemicals (-5.7%), miscellaneous products (-28.7%), maintenance, repair and installation of machinery and equipment (-17.7%), non-metallic mineral products (-6.3%), metal products (-5.3%), other transportation equipment (-16.4%), coke, petroleum products and biofuels (-1.0%) and mining and quarrying industry (-1.0%).

On the other hand, also against June 2020, among the five activities recording increase, the main influence was that of food products (8.0%). Other relevant positive impacts were those of pharmaceuticals (13.1%), beverages (7.8%) and toiletries, soaps, cleaning and personal hygiene products (12.1%).

Among the major economic categories, also in comparison with the same month in 2019, durable consumer goods (35.1%) and capital goods (-22.2%) recorded, in June 2020, the most significant decreases. Producers of intermediate goods (-5.9%) and semi-durable and non-durable consumer goods (-5.6%) also recorded less significant decreases versus the national average (-9.0%).

It is worth mentioning that these high negative results evidence the lower pace of industry output, mainly due to the effects of the COVID-19 pandemic.

The segment of durable consumer goods contracted 35.1% in June 2020, against June 2019, the fifth negative result in a row in this type of comparison. The sector was mainly affected by the decline in car production (-60.2%). It is also worth mentioning the decreases in furniture (-1.6%) and other household appliances (-6.6%). On the other hand, positive impacts came from "brown goods" (13.0%) and "white goods" (6.4%) and motorcycles (16.0%).

The sector of capital goods, having decreased 22.2% in June 2020, accounted for the fifth negative rate in a row in this comparison. The segment was influenced by the decrease in the group of capital goods for transportation equipment (-39.8%), mainly due to the reduced production of tractor trucks for trailers and semi-trailers, airplanes and vehicles for transportation of goods. The other negative rates were registered by capital goods for industrial use(-19.8%), construction (-46.1%) and mixed use (-14.0%). On the other hand, the positive impacts were those of capital goods for electricity (10.7%) and agriculture (6.4%). 

Also against the same month a year ago, intermediate goods fell by 5.9% in June 2020, after decreases in March (-1.5%), April (-17.6%) and May (-14.7%). The result was due to decreases associated with the activities of motor vehicles, trailers and bodies (-52.4%), basic metals (-25.3%), machinery and equipment (-25.5%), textiles (-24.2%), rubber products and plastic material (-9.4%), metal products (-10.2%), other chemicals (-5.5%), non-metallic mineral products (-6.1%) and mining and quarrying industry (-1.0%). Positive results came from food products (13.7%), coke, petroleum products and biofuels (7.2%) and pulp, paper and paper products (0.1%).

It is also worth mentioning the decreases in typical inputs for civil construction (-3.3%), in the seventh month in a row; of packaging (-1.5%), with its third negative rate in a row.

The output of semi-durable and non-durable goods fell 5.6% in June 2020, the sixth negative rate in a row in this type of comparison. The performance was due to decreases in the groups of semi-durables (-37.6%) and fuels (-16.3%). However, there were decreases in elaborated food and beverages for domestic consumption (5.4%) and non-durable goods (4.8%).

Production decreases 19.4% in Q2, the most significant decrease in the series 

The industrial sector fell 19.4% in Q2 2020 and recorded the most significant decrease since the start of the series, against the same quarter a year ago, remaining on a downward trend since the last quarter of 2018 (-1.3%).

The expansion of losses from the first (-1.6%) to the second quarter of 2020 (-19.4%) was explained by deceleration in the four major economic categories, the highlights being durable consumer goods (from -6.5% to -64.9%) and capital goods (from -2.0% to -38.0%), mainly due to the reduced production of cars (from -14.9% to -83.2%) and of household appliances (from 5.9% to -33.2%), in the former; and capital goods for transportation equipment (from -7.0% to -61.1%) and for industrial use (from 2.0% to -33.0%), in the latter. The sectors producing semi-durable and non-durable consumer goods (from -3.3% to -16.7%) nd of intermediate goods (from -0.1% to -12.7%) also recorded decreases between the two periods. 

In terms of the cumulative index in the year, against the same period a year ago fell 10.9%, with negative results in four of the majr economic categories, 21 of the 26 subsectors, 65 of the 79 groups and 75.3% of the 805 products surveyed. Among the activities, motor vehicles, trailers and bodies (-43.6%) accounted for the main negative contribution to the average of industry, due, to a great extent, by the items cars, tractor-trucks for trailers and semi-trailers, pieces  vehicles for the transoprtation of goods. 

It is also worth mentioning the negative contributions from basic metals (-15.8%), machinery and equipment (-16.7%), manufacture of wearing apparel and accessories (-36.6%), leather, travel articles and footwear (-33.7%), non-metallic mineral products (-13.7%), rubber products and plastic material (-12.7%), beverages (-11.9%), other transportation equipment (-36.1%), metal products (-11.9%), other chemicals (-6.1%), computer, electronic and optical equipment (-15.5%), textiles (-22.0%), electric machines, appliances and material (-13.6%) and mining and quarrying industry (-2.8%). On the other hand, among the five activities that recorded increase in output, the main influences on the industry overall came from food products (3.7%) and coke, petroleum products and biofuels (3. 7%).

Among the major economic categories, results for the first semester of 2020 recorded a lower pace for durable consumer goods (-36.8%) and capital goods (-21.2%), due, to a great extent, to the reduction of the production of cars (-51.4%) and household appliances (-13.5%), in the former; and capital goods for transportation equipment (-36.2%) and for industrial use (-16.3%), in the latter. Producers o semi-durable and non-durable consumer goods (-10.3%) and of intermediate goods (-6.6%) also had negative rates, but less significant than the national average (-10.9%).