Industry advances 0.1% in April, but production accumulates a fall of 3.4% in the year

Industry advances 0.1% in April, but production accumulates a fall of 3.4% in the year

The sector is 1.5% below the pre-pandemic level and continues to slide amid rising production costs and shortages of raw materials

THE Brazilian industrial production remains without signs of robust growth. The sector advanced 0.1% from March to April this year, according to data from the Monthly Industrial Survey (PIM), released by the IBGE this Friday. In the first four months, it accumulates a fall of 3.4%.

If the last twelve months are considered, the sector accumulates a retraction of 0.3%. It is the first negative result since March 2021 (-3.1%). In comparison with April 2021, production fell by 0.5%. The result was not a surprise to analysts, who had expected a 0.1% increase in the quarter.

This is the first sectoral result presented by the IBGE for the month of April, including part of the performance of the second quarter of this year. Last Thursday, the IBGE released a 1% increase in GDP in the first quarter, with the industry still skating in the period.

The research manager, André Macedo, explains that the industrial sector had an improvement in its performance in the last three months in which it had positive results. But this improvement is linked to the end of health restrictions and is insufficient to compensate for the losses of the past.

— Even though in the last 6 months the industry has shown 5 rates in the positive field, it is still 1.5% below February 2020 — says Macedo.

According to the IBGE, industrial plants still perceive the increase in production costs and the scarcity of some raw materials.

Fuel production pulls up

Of the four economic categories surveyed, two were high. Semi and non-durable consumer goods rose 2.3% while intermediate goods advanced 0.8%. The activity that most contributed to the positive change in April was coke, petroleum products and biofuels, with growth of 4.6%. Other activities that contributed to the positive change in April were: beverages (5.2%) and other chemical products (2.8%).

On the other hand, the sectors producing capital goods dropped 9.2% and durable consumer goods fell 5.5%. The retraction in these two sectors ended up interrupting two consecutive months of growth in production, a period in which they accumulated advances of 12.1% and 3.8%, respectively.


According to the results of the first quarter of this year, the Brazilian economy has been boosted by household consumption. Consumption, however, is not enough to leverage the industry. High inflation and high interest rates limit the performance of the sector. This is because inflation erodes household income, while high interest rates make credit more expensive, which harms demand and domestic production, mainly for items in the durable goods sector.

On the supply side, the industrial sector still faces problems with the disorganization of production chains, which has led to a lack of components and an increase in the price of raw materials used by factories.

Despite the challenging scenario for the sector, entrepreneurs are more optimistic for the coming months. The FGV IBRE Industry Confidence Index (ICI) rose 2.3 points in May to 99.7 points, the highest level since December 2021, when it stood at 100.1 points.

“The magnitude of the increase was influenced by the expressive recovery of optimism among producers of non-durables. At the opposite extreme, the only use category to register an increase in pessimism in the month is that of durable goods, a caution that is directly related to the gradual increase in interest rates”, comments Aloisio Campelo Jr., economist at FGV IBRE.

Source: O Globo Agency

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