Brazil: Industrial production falls 0.2% in November compared to October, the sixth negative result in a row

RIO DE JANEIRO, BRAZIL – Industrial production fell by 0.2% in November compared to October, recording the sixth consecutive month of negative results. Compared to November 2020, the industry shrank 4.4% in November 2021.

The data was released on Thursday (6) by the Brazilian Institute of Geography and Statistics (IBGE).

The data frustrated the estimates. The median expectation of analysts heard by Refinitiv was a slight increase of 0.1% in the monthly comparison and a drop of 4.2% in the annual comparison.

Despite accumulating, in the 11 months of 2021, an advance of 4.7% compared to the same period last year, the industry continues to move further and further away from the pre-pandemic level, highlights the Institute.

“When we look at the previous year, the results throughout 2021 are almost always positive, because the basis of comparison is low, since, at the beginning of the pandemic, the industry even stopped its activities, with the year 2020 closing with a retreat of 4.5%,” explains the research manager, André Macedo.

He recalls that the sector is still suffering the effects of the global pandemic, which caused the shortage of some inputs and increased the cost of production.

“Besides this, the industry suffers from high-interest rates and low demand, impacted by high inflation and precarious employment conditions, since with lower income, the worker consumes less,” says Macedo.

“The production of capital goods retreated 3.0% and eliminated the 1.8% advance seen in October. The semi-durable and intermediate goods categories registered stability, and they account for 80% of the industry average, so we have a result close to stability in the overall average. On the other hand, the consumer durables sector showed the only positive rate, of 0.5%,” points out Macedo.

He also points out that the industrial branches showed a different movement from what they showed in most of 2021.

“Just under half, twelve out of 26, of the surveyed branches had negative results. This is something different from what we had been observing, that is, more activities in the negative field than in the positive one,” highlights Macedo.

Among the activities, the main negative influences came from the rubber and plastic material products (-4.8%), which lost the entire accumulated expansion (3.5%) in September and October, and from the metallurgy (-3.0%), which marked the third consecutive fall, getting a loss of 7.7% in the period.

Compared to November 2020, the industry shrank 4.4% in November 2021, with negative results in three of the four major economic categories, 19 of the 26 industries, 55 of the 79 groups, and 59.1% of the 805 products surveyed. November 2021 had the same number of working days (20) as the same month last year (20).

In the year-to-date index, compared to the same period a year earlier, the 4.7% expansion in the industry average was accompanied by positive results in all significant economic categories, 18 of the 26 industries, 55 of the 79 groups, and 65.0% of the 805 products surveyed.