Brazil Industrial Production Falls 0.6% in August
BRAZIL · ECONOMY
Key Facts
- —The country Brazil is Latin America’s largest economy, with more than 210 million people. Its factories, mines and oil fields make cars, steel, food, fuel and iron ore.
- —What happened On Friday 2 October 2026, the statistics agency IBGE said industrial production fell 0.6% in August from July and was 1.2% lower than in August 2025.
- —The numbers Output fell in 16 of 25 branches. Year to date it is up 0.8%, and up 0.6% over 12 months. IBGE revised July to +0.1%, from +0.2% (IBGE, 2 Oct 2026).
- —What it means for you Weak factory data feed into how far the central bank cuts its benchmark Selic rate, 13.75% since 16 September. That moves bond yields, the real and credit costs.
- —Still open Whether industry has found a floor after the mid-year slump, and how Sunday’s presidential election shifts interest-rate expectations.
Brazil industrial production fell 0.6% in August 2026 from July, the national statistics agency IBGE said on Friday 2 October. Output was 1.2% lower than in August 2025.
The data cover factories, mines and oil fields, and follow a weak spell in the middle of the year. It arrives two days before Brazilians vote in the first round of the presidential election on Sunday 4 October.
What the August Brazil industrial production data show
IBGE’s monthly survey, known as PIM-PF, measures the physical volume of output in mining and manufacturing. Monthly changes are adjusted for seasonal effects such as holidays and working days.
From January to August, output was 0.8% higher than in the same months of 2025. Over the 12 months to August, it was 0.6% higher than in the previous 12 months.
Output fell in 16 of the 25 branches IBGE tracks. Tobacco products fell 23.4% and pharmaceuticals 5.5%, while food products rose 1.0%.
Mining and oil extraction fell 0.7%, a fourth monthly decline in a row. Manufacturing also fell 0.7%.
All four main categories fell, led by semi-durable and non-durable consumer goods (down 1.7%). Durable consumer goods fell 1.0%, capital goods 0.6% and intermediate goods 0.2%.
IBGE revised July’s figure to a 0.1% rise, from the 0.2% rise first reported.
A year of swings
Industry started 2026 strongly. Output rose 2.1% in January and 0.9% in February, and IBGE’s adjusted index reached its high for the year in April.
Then it fell 1.0% in May and 1.6% in June, erasing most of those gains. July’s 0.1% rise left the index 2.5% below April’s level.
After the August reading, the adjusted index stands 3.1% below its April 2026 level and 1.3% above February 2020, before the pandemic. It remains 15.6% below its record of May 2011.
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+1.55%
190,100.03
+1.55%
63,828.60
-0.60%
10,931.11
+0.21%
2,781,181
+0.81%
2,514.68
-0.61%
59,751.67
+0.19%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 190,100.03 | +1.55% | +21.85% | 187,197.46 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
Why factories are struggling
Borrowing costs are the main brake. The Selic stayed at 15% from June 2025 until March 2026, when the central bank’s rate committee, Copom, began cutting.
Five cuts have taken it to 13.75%, the latest on 16 September. In its latest minutes, the committee said demand still drives inflation. Annual inflation was 4.22% in August, so the rate after inflation is still above 9%.
Business surveys point the same way. The National Confederation of Industry (CNI), the main business lobby, said its confidence index fell to 44.9 in September.
That was the 21st month in a row below 50, the line between confidence and pessimism. A monthly survey of factory purchasing managers fell to 44.8 in September.
CNI blames high interest rates and household debt for weaker demand for industrial goods. Its survey put capacity use in manufacturing at 77.4% in July.
What it means for foreign readers
For investors, weak industry supports the case for further rate cuts. The central bank, however, sets rates to meet its inflation target, not to lift factory output.
Lower rates would ease credit for firms and households. They would also trim the returns foreign investors earn on Brazilian fixed income.
For companies that buy from or sell to Brazil, weak output and idle capacity point to spare room rather than shortages. In CNI’s reading, the constraint is demand, not supply.
What Is Not Yet Known
It is not yet known whether the August drop was a one-off or the start of a new slide; IBGE’s September figure will tell. Copom meets again in early November, and the presidential run-off, if needed, is on 25 October.
The August fall does not mean a recession: monthly industrial figures swing widely and are often revised. The wider economy still grew 0.5% in the second quarter from the first, IBGE reported on 1 September. For the bigger picture, see our guide to Brazil’s economy in 2026.
What does Brazil’s industrial production index measure?
IBGE’s monthly PIM-PF survey measures the physical volume of output in mining and manufacturing, not sales or profits. Monthly changes are adjusted for seasonal effects, and figures are often revised the following month.
Why are Brazil’s interest rates so high?
The central bank raised the Selic to 15% in June 2025 to bring inflation back toward its 3% target. It began cutting in March 2026 and has brought the rate to 13.75%, well above annual inflation of 4.22% in August.
Does weak industry mean Brazil is in recession?
No. Industry is a smaller part of the economy than services, and Brazil’s GDP grew 0.5% in the second quarter of 2026. Monthly factory figures swing widely and say little on their own.
Sources: IBGE, industrial production release for August, 2 October 2026, IBGE, industrial production release for July, 2 September 2026, IBGE SIDRA table 8888 (PIM-PF), IBGE, GDP release for the second quarter, 1 September 2026, Banco Central do Brasil, Copom decisions and Selic history (statement of 16 September 2026), Banco Central do Brasil, IPCA inflation over 12 months (series 13522), Agência Brasil, CNI industrial confidence, 14 September 2026, Agência Brasil, CNI industrial indicators for July, 10 September 2026. All retrieved 2 October 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error
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