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National industry

Industrial output drops 9.1% in March 2020

May 05, 2020 09h00 AM | Last Updated: May 11, 2020 10h32 AM

In the seasonally-adjusted series, the industrial output retreated 9.1% in March 2020 over February 2020, the largest drop since May 2018 (-11.0%), reflecting the effect of the social distancing caused by the Covid-19 pandemic. In the seasonally-unadjusted series, the industry declined 3.8% in relation to March 2019, the fifth consecutive negative figure in this comparison. The industry accrued a reduction of 1.7% in the year. In the cumulative index in 12 months, the industry retreated 1.0%. The complete publication of the Monthly Industrial Survey - PIM is on the right side.

March 2020 / February 2020 -9.1%
March 2020 / March 2019 -3.8%
Cumulative in the year -1.7%
Cumulative in 12 months -1.0%
Quarterly moving average -2.4%

The reduction of 9.1% between February and March 2020 was the steepest one since May 2018 (-11.0%) and took the industrial output to the level close to that of August 2003, standing 24.0% below the record level of May 2011. This result reflected the expansion of the segments with negative rates: all the four major economic categories and 23 out of the 26 sectors surveyed, emphasizing the deepening the shutdown of a number of industrial plants, due to the social distancing as a result of the Covid-19 pandemic. The quarterly moving average index retreated 2.4% in March 2020 against the level of the previous month, the most intense loss since May 2018 (-3.3%).

Industrial Output Indicators by Major Economic Category
Brazil - March 2020
Major Economic Categories Change (%)   
  March 2020/February 2020* March 2020/March 2019 Cumulative January-March Cumulative in the Last 12 Months
Capital Goods -15.2 -3.9 -1.8 0.2
Intermediate Goods -3.8 -1.7 -0.2 -1.8
Consumer Goods -14.5 -7.7 -3.9 0.7
Durable -23.5 -9.7 -6.4 1.4
Semi-durable and Non-durable -12.0 -7.1 -3.2 0.6
Overall Industry -9.1 -3.8 -1.7 -1.0
*Seasonally-adjusted series

  

Production retreated in all economic categories and in 23 of 26 sectors

The decline of 9.1% in the industrial activity from February to March 2020 reached all of major economic categories and most (23) of the 26 sectors surveyed. Among the activities, the most relevant negative influence was in motor vehicles, trailers and bodies (-28.0%), pressed by the shutdown in a number of producing units, due to the effects of the Covid-19 pandemic. As a result, this sector registered the most intense drop since May 2018 (-29.0%) and offset the cumulative expansion of 7.8% in the first months of 2020.

Other relevant negative contributions to the overall industry came from the manufacture of wearing apparel and accessories (-37.8%), beverages (-19.4%), leather, travel articles and footwear (-31.5%), rubber and plastic products (-12.5%), machinery and equipment (-9.1%), non-metallic mineral products (-11.9%), textiles (-20.0%), furniture (-27.2%), other chemicals (-4.7%), pharm-chemicals and pharmaceuticals (-10.9%), electrical machinery and apparatus (-10.6%), fabricated metal products (-7.5%), wood products (-16.1%), basic metals (-3.4%), mining and quarrying industries (-1.6%) and computer equipment, electronic and optical products (-7.2%).

On the other hand, the sectors of printing and reproduction of recorded media (8.4%), toiletries, soaps, cleaning and personal hygiene products (0.7%) and maintenance, repair and installation of machinery and equipment (0.3%) recorded the advances in the output this month, maintaining the positive behavior reported in February and accruing gains of 16.2%, 4.3% and 0.9% in this period, respectively.

Having declined 23.5% still in relation to February 2020, durable consumer goods posted the sharpest drop in March 2020, influenced, at a great extent, by the decreasing production of cars. This reduction was the most intense since May 2018 (-23.8%) and marked the second consecutive month of drop, registering a cumulative loss of 23.7% in this period.

The sectors of capital goods (-15.2%) and semi and non-durable consumer goods (-12.0%) also recorded higher negative rates than the national average (-9.1%), the former offsetting the cumulative gain of 13.8% in the first two months of 2020, and the latter maintaining the negative behavior since November 2019, with a reduction of 14.4% in this period. The sector of capital goods registered the steepest drop since May 2018 (-18.0%) and semi and non-durable consumer goods recorded the most intense negative figure since the beginning of the time series.

The sector of intermediate goods (-3.8%) also posted a decline in the production, registering the largest loss since May 2018 (-7.3%), thus interrupting three consecutive months of positive results and that accrued an expansion of 1.8%.

Quarterly moving average decreases 2.4%

Still concerning the seasonally-adjusted series, the evolution of the quarterly moving average index for the overall industry pointed to a negative change of 2.4% in the quarter ended in March 2020 against the level of the previous month, after advancing 0.3% in February, when it halted the downward trend started in October 2019.

Among the major economic categories, still in relation to the marginal movement of this index, the segments of durable consumer goods (-6.6%) and semi and non-durable consumer goods (-4.1%) recorded the most intense declines this month and maintained the negative behavior since December 2019, with cumulative losses of -9.8% and -5.9%, respectively. The sectors producing capital goods (-1.1%) and intermediate goods (-0.7%) also reported negative rates in March 2020, the former maintaining the predominantly downward path started in June 2019, and the latter offsetting the gain of 0.6% registered in the previous month, when it interrupted three consecutive months of output drops.

Industry retreated 3.8% compared with March 2019

Compared with the same month last year, the industrial sector retreated 3.8% in March 2020, with negative figures in the four major economic categories, 21 out of the 26 sectors, 48 out of the 79 groups and 59.3% of the 805 products surveyed. Even with a positive calendar effect – since with 22 days, March 2020 had three more business days than the same month in the previous year (19) –, the social distancing due to the Covid-19 pandemic clearly affected the production of several producing units in Brazil.

Among the activities, that of motor vehicles, trailers and bodies (-16.2%) had the highest negative impact on the industry average, pressed, to a large extent, by the items cars, tractor trucks for trailers and semi-trailers and car pieces.

Also contributing negatively, the sectors of beverages (-18.8%), manufacture of wearing apparel and accessories (-27.5%), leather, travel articles and footwear (-26.7%), non-metallic mineral products (-10.6%), basic metals (-5.8%), rubber and plastic products (-5.0%), wood products (-12.6%), textiles (-9.9%), fabricated metal products (-3.9%), furniture (-12.3%), pharm-chemicals and pharmaceuticals (-4.3%) and tobacco products (-14.3%) stood out.

On the other hand, still comparing with March 2019, among the five activities that expanded the output, the major influences on the industry overall were registered by coke, petroleum products and biofuels (8.1%) and food products (3.4%). Other important positive impacts were recorded by the sectors of toiletries, soaps, cleaning and personal hygiene products (7.9%) and pulp, paper and paper products (3.1%).

Among the major economic categories, still comparing with the same month in 2019, durable consumer goods (-9.7%) and semi and non-durable consumer goods (-7.1%) posted the sharpest declines in March 2020. The sectors of capital goods (-3.9%) and intermediate goods (-1.7%) also registered negative rates this month, with the former reporting a drop slightly higher than the national average (-3.8%) and the latter, a more moderate reduction in the monthly index among the economic categories.

The segment of durable consumer goods retreated 9.7% in March 2020 over the same period last year, after dropping two digits in February (-10.6%), when it interrupted five months of consecutive positive figures in this type of comparison. This sector was particularly pressed by the reduced production of cars (-19.3%).  Brown goods (-0.8%), furniture (-8.8%) and other house appliances (-13.6%) also declined. On the other hand, the major positive impacts were registered by white goods (8.7%) and motorcycles (12.8%).

Having retreated 7.1% in the monthly index of March 2020, the sector producing semi and non-durable consumer goods recorded the third consecutive negative rate and the most intense since May 2018 (-9.4%) in this type of comparison. The performance was due to the drop of 24.6% reported by the group of semi-durable. It is also worth mentioning the negative results recorded by the groups of food and beverages for domestic consumption (-3.8%) and fuels (-11.9%). In contrast, the group of non-durable (1.3%) recorded the only positive rate in this category.

The sector of capital goods declined 3.9% in March 2020, after also posting a negative rate in February (-4.6%). This segment was influenced by the drop in the group of capital goods for transportation equipment (-10.0%). The other negative rates were registered by capital goods for industrial use (-2.6%), for mixed use (-7.0%) and for agriculture (-5.1%). Conversely, the positive impacts were registered by the groups of capital goods for electricity (6.3%) and for construction (3.0%).

The production of intermediate goods reduced 1.7% in March 2020, after advancing 2.7% in February, when it interrupted three consecutive months of negative rates in this type of comparison. This result was mainly due to the retreat in the products associated to the activities of motor vehicles, trailers and bodies (-19.5%), non-metallic mineral products (-10.7%), basic metals (-5.8%), rubber and plastic products (-5.3%), machinery and equipment (-10.5%), fabricated metal products (-5.0%), textiles (-6.8%) and mining and quarrying industries (-0.4%), whereas the positive pressures were recorded by coke, petroleum products and biofuels (13.8%), food products (5.7%), pulp, paper and paper products (2.4%) and other chemicals (0.1%).

Still in this economic category, it is worth mentioning the results of the groups of typical inputs for civil construction (-4.8%), which posted the fourth consecutive negative rate and the most intense since May 2018 (-8.0%), and of packaging (1.6%), in the second consecutive month of growth in this type of comparison.

Compared with the January-March period of 2020, against the same period a year ago, the industrial sector decreased 1.7%, registering negative figures in four out of the four major economic categories, 18 out of the 26 sectors, 46 out of the 79 groups and 56.3% of the 805 products surveyed. Among the activities, motor vehicles, trailers and bodies (-9.0%) and mining and quarrying industries (-5.8%) exerted the largest negative influences on the industry average, pressed, to a great extent, by the items cars, in the former and iron ore, in the latter.

It is also highlighting the negative contributions registered by the sectors of manufacture of wearing apparel and accessories (-10.9%), beverages (-4.3%), non-metallic mineral products (-4.8%), leather, travel articles and footwear (-9.8%%), maintenance, repair and installation of machinery and equipment (-11.2%), printing and reproduction of recorded media (-23.1%), other transportation equipment (-11.9%) and basic metals (-2.2%). Among the eight activities that increased the output, the major influence on the overall industry was recorded by coke, petroleum products and biofuels (11.3%), leveraged, to a great extent, by the increasing manufacture of items fuel oil and naphtha for petrochemistry.  Other important positive impacts were recorded by the sectors of food products (1.3%) and pulp, paper and paper products (3.0%).

Among the major economic categories, the profile of the results for the first three months of 2020 showed a lower dynamism for durable consumer goods (-6.4%), pressed, above all, by the reduced manufacture of cars (-14.9%). The sectors producing semi and non-durable consumer goods (-3.2%) and capital goods (-1.8%) also retreated more than the national average (-1.7%), whereas the segment of intermediate goods (-0.2%) posted the most moderate negative rate in the cumulative index in the year.