Brazil’s industrial production rises 1.4% in May after three consecutive declines – IBGE

RIO DE JANEIRO, BRAZIL – Brazilian industrial production returned to positive territory, rising 1.4% in May compared to April, according to the Monthly Industrial Survey – Physical Production (PIM-PF) released Friday by the Brazilian Institute of Geography and Statistics (IBGE).

With this rise, it interrupted a series of three consecutive monthly declines, in which it accumulated a loss of 4.7%. In April, according to revised data, the indicator declined by 1.5% (originally, the loss was 1.3%).

The May result also allowed industrial production to return to the pre-pandemic levels of February 2020, long after the recent setbacks. Despite the increase, the sector is still 16.7% below the record level recorded in May 2011.

However, the performance of the fifth month of 2021 was slightly below the median of the estimates of 30 financial institutions and consultants surveyed by Valor Data, which was 1.6%. Forecasts ranged from a 1% decline to a 3.3% increase.

Compared to May 2020, industrial production was up 24%, reflecting the low basis for comparison. In May 2020, the industry was still facing operational restrictions due to the onset of the pandemic. On this basis of comparison, the median expectation of the market was that the indicator had increased by 24.6%, according to the Valor Data survey. Estimates ranged from 17.8% to 27.5%.

Cumulative industrial production in 12 months was 4.9% growth. In the cumulative result of 2021, until May, industry grew by 13.1%.

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Of the four major categories of the industrial sector examined by IBGE, two recorded declines and two recorded increases in May. Compared to May 2020, all four showed a significant increase, influenced by the low basis of comparison. In that month, the Brazilian industry had a sharp drop in production due to the pandemic’s start. The 1.4% gain in the industry in May was also accompanied by increases in 15 of the 26 sectors surveyed.

The production of capital goods increased by 1.3% between April and May. Compared to May 2020, production increased by 76.7%.

According to IBGE data, the result of semi-finished and non-durable goods was a 3.6% increase in production in May compared to April. Compared to May 2020, there was an increase of 13.2%.

Intermediate goods posted a 0.6% month-over-month loss in May but an 18.1% year-over-year increase. The category represents 55% of the industry.

In turn, the production of durable goods fell by 2.4% in May but increased by 149.4% compared to the same period in 2020.

Among the activities, the main influences for the increase in industrial production came from food (2.9%) – after a 3.2% drop in April -, coke, oil products, and biofuels (3.0%) – which eliminated part of the 10.0% loss in April – and raw materials (2.0%). The latter recorded its third consecutive increase, rising by 10% in the period.

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