Brazil’s industrial sector posts two-month growth propelled by enhanced oil and iron ore extraction

Brazil’s industrial sector witnessed a second consecutive month of production growth in June.

The Brazilian Institute of Geography and Statistics (IBGE) reported a 0.1% production rise compared to the preceding month, contradicting earlier predictions of a decline.

Despite these encouraging signs in May and June, with a 0.3% and 0.1% production increase, these positive outcomes failed to reverse a 0.6% reduction noted in April.

Compared to June of the previous year, there was a modest 0.3% rise.

However, the pace of growth remains slower than necessary to rebound from recent losses, with the industry still registering a 1.4% deficit from pre-pandemic levels in February 2020.

Looking ahead, the industrial sector faces continued challenges due to high-interest rates, rising household debt, and the worldwide slowdown in manufacturing activities.

June’s main contributors to industrial growth were the extractive industries, which increased by 2.9%, propelled by enhanced oil and iron ore extraction.

Other sectors boosting the positive trend included apparel, accessories, rubber, plastic, and metal products.

On the contrary, the production of coke, petroleum-derived products, and biofuels, alongside automobiles, trailers and bodies, and machinery and equipment, contributed negatively.

Of the economic categories, only Consumer Goods experienced increased production, whereas Capital Goods and Intermediate Goods underwent respective declines.

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