São Paulo’s industry advanced 3.9% in May and boosted national performance

RIO DE JANEIRO, BRAZIL – São Paulo, by far Brazil’s main industrial center, left behind the 4.8% fall of its production in April and had a 3.9% rise in May, according to  the Regional Monthly Industrial Survey (PIM Regional), released on Thursday by the Brazilian Institute of Geography and Statistics (IBGE).

São Paulo was the main reason for the 1.4% increase in Brazilian industrial production in May, compared to April. The performance of São Paulo industry, which accounts for 34% of the national total, reflects mainly, according to the IBGE, the good performance of the food and oil products sectors. The May high, however, was not enough to recover all the loss recorded in April.

“The May high in São Paulo softens the loss registered in April, but it is not enough to eliminate the loss,” says Bernardo Almeida, manager of the survey.

Throughout 2021, the São Paulo industry had ups and downs in its production, influenced by the restriction of activities due to the pandemic. The year started with a high of 1.1% in January, followed by a retreat of 1.4% in February and a positive variation of 0.5% in March.

The data released by the IBGE July 8 brought a revision of the comparison with São Paulo industry’s performance in April. Initially, the fall in production was 3.3% against the prior month before but was revised to 4.8%.

According to Bernardo Almeida, the revision is also linked to the pandemic’s seasonality changes. In April, for example, he recalls that there were still changes in holidays and industry shutdowns, with special schemes for activities, rotations, or lockdowns.

“The revisions reflect the issue of seasonal adjustment methodology. The pandemic is changing the seasonality, and this affects the seasonal adjustment model,” he explains.

In the passage between May and June, the second-largest influence came from Minas Gerais industry, which rose 4.6%. The movement was driven by the food and automotive vehicle sectors.

With a high of 4.3%, Rio de Janeiro had the third-largest impact on the growth of  Brazilian industry in June. The good result of Rio de Janeiro’s industry was driven by oil products and also by the extractive industry.