Brazilian Industry Grows for Sixth Consecutive Month, Surpasses Pre-Pandemic Level

RIO DE JANEIRO, BRAZIL – Brazilian industrial production climbed 1.1% in October over the preceding month, according to data released on Wednesday by the Brazilian Institute of Geography and Statistics (IBGE).

With 39% growth for the six-month period of positive results, the sector is up 1.4% over the February level, before the worsening of the Covid-19 pandemic in the country.

In March and April, industrial production fell to its lowest level on record as a result of the isolation measures to contain the coronavirus, and in September it managed to recover the losses accumulated at the peak of the pandemic.

Compared to October 2019, there was an increase of 0.3% in production, although in the year to date the industry has contracted by 6.3%, highlighting the relevant impact of containment measures on the sector.

“There is still significant room to recover, there were still losses to be recovered before the pandemic,” said research manager André Macedo, noting that the sector is still 14.9% below the record level reached in May 2011.

The shutdowns caused by the coronavirus pandemic have hit industry, which has been gradually recovering with the relaxation of isolation and aid measures. The large contingent of unemployed in the country also helps to pressure the economy.

“Any maintenance of this industrial trajectory hinges on the labor market’s reaction, there are still many people out of it. It is essential to think about increasing employment and income,” added Macedo.

In October the highlight was the 7.0% increase in Capital Goods production, an investment measure. The other positive rate in the month was recorded by Durable Goods Consumption, of 1.4%. Both categories posted production growth for the sixth month in a row.

On the other hand, Intermediary Goods production fell 0.2% in October over the preceding month, while Semi- and Non-Durable Consumption Goods fell 0.1%, interrupting a five-month streak of production growth.

Among the activities, the main positive influence was the 4.7% increase in Motor Vehicles, trailers and bodies, a sector that has accumulated growth of 1,075.8% in six consecutive months of production growth. Nevertheless, it remains 9.1% below the February level.

A fact to be noted is the lower growth spread among the activities. While in September 22 of the 26 branches researched posted an increase in production, in October there were only 15.

“The emergency aid was important for the sector’s reaction, but this growth has been decreasing. Until September it was a widespread growth in the industry, but in October it was less widespread (among the activities),” added Macedo.

Source: Veja