(Analysis) Brazil’s industrial sector achieved its best global ranking since 2019, rising to 25th place in 2024, according to data from the United Nations Industrial Development Organization (UNIDO).
The sector grew by 3.2% last year, outperforming the global average of 2.3%. This marked a significant recovery from 2023, when Brazil ranked 45th after a sharp contraction.
For the first time in a decade, growth occurred without relying on rebound effects from previous crises. Government measures played a key role in this improvement.
Fiscal stimulus programs, including Minha Casa, Minha Vida, and a new fiscal framework ensuring public investment floors, supported industrial activity. Falling interest rates until May and a strong labor market further boosted demand.
However, the final quarter of 2024 showed signs of slowing momentum, with industrial production contracting by 0.1% while global production grew by 1%. Projections for 2025 suggest modest growth at just 1.6%.
Despite these gains, Brazil’s industrial sector remains far weaker than it was decades ago. In the mid-20th century, Brazil was an emerging industrial powerhouse, fueled by state-led development policies and import substitution strategies.
By the mid-1980s, it had one of the most dynamic manufacturing bases globally. However, liberal economic reforms in the late 1980s shifted focus toward financial markets over industrial development.
Brazil’s Struggle with Deindustrialization
Over the past thirty years, Brazil has increasingly relied on commodities like soybeans and iron ore for exports instead of manufactured goods. The decline is stark when compared across decades.
Thirty years ago, Brazil had a diversified manufacturing base and high growth rates. Twenty years ago, it remained competitive in sectors like automotive and aerospace but faced growing competition from Asia.
Ten years ago, stagnation became evident as technological gaps widened and deindustrialization accelerated. Today, its industrial production remains 15.6% below pre-pandemic levels despite recent improvements.
Brazil’s global standing highlights its challenges relative to leading industrial nations and emerging competitors. Asian countries like China and South Korea have surged ahead through sustained investments in technology and innovation.
Even smaller Latin American economies have adopted advanced manufacturing technologies more effectively than Brazil. Structural issues continue to hinder Brazil’s industrial recovery.
Technological lag remains significant as much of its industrial base relies on outdated systems. Protectionist measures abroad, such as recent U.S. tariffs, could disrupt trade flows and increase domestic competition. Political instability and inconsistent policies have historically undermined long-term planning.
Brazil’s rise to 25th place reflects progress but also underscores decades of decline that have left its industrial sector far behind global leaders. Sustained recovery will require addressing deep-rooted structural challenges to regain competitiveness on the world stage.