Brazil Industry Production Falls 0.3 Percent in July, Third Consecutive Negative Month

RIO DE JANEIRO, BRAZIL – Brazil’s industry’s production fell 0.3 percent in July, compared to June, accumulating -1.7 percent in the year.

It is the third negative month in a row, following declines in May and June. Compared to July 2018, the result was -2.5 percent and, in 12 months, -1.3 percent. The results are from the Monthly Industrial Survey, released today by the IBGE.

Despite being the third consecutive negative result, the July profile was different from that observed in May and June, explains the survey manager, André Macedo: “Before, the retreat profile was widespread. Already in July, 15 of the 26 activities were positive indicating a concentration of negative results”.

The negative highlights compared with June were with other chemical products (-2.6 percent), beverages (-4 percent), food (-1 percent) and computer equipment and electronic products (-3.3 percent).

On the other hand, the extractive industry grew 6 percent, the third consecutive positive result, fora cumulative growth of 18.5 percent in three months and recovering part of the -24.5 percent accumulated in the previous four months.

Compared to July 2018, the result of -2.5 percent was less intense than the -5.9 percent recorded in June. The difference can be explained, in part, by the fact that July has an extra business day this year. The accumulated figure for the year (-1.7 percent) accelerated in relation to the first half result (-1.5 percent).

In the table by major business categories, only intermediate goods fell, both in comparison with July 2018 (-5.4 percent) and in the cumulative total for the year (-3 percdent). In both cases, the category suffered pressure from the extractive industry.

“These are two different views of the same activity. In the margin, we observed a partial recovery of iron ore extraction due to the gradual reopening of mining sites after a period of suspension for inspection. However, compared to 2018, the basis of comparison is high and it is clear that there is still much influence of the rupture of the Brumadinho dam”, concludes the research manager.