Second Industrial Slowdown in a Row in Brazil Signals Tougher Times Ahead
Brazil’s official statistics agency, IBGE, reports that industrial production dropped by 0.5% in May 2025 compared to April. This marks the second month in a row of falling output and highlights growing problems for the country’s factories.
Nine out of 15 major regions saw their factory output shrink, with Mato Grosso down by 7%, Bahia by 3.7%, and Amazonas by 3.3%. São Paulo, Brazil’s industrial heartland, also fell by 0.8%.
The main reasons are high interest rates and stubborn inflation, which have made borrowing and spending more expensive for both companies and families.
The central bank raised Brazil’s main interest rate to 15% in June to try to control rising prices. But this has made it harder for businesses to get loans and for people to buy goods like cars.
The auto industry, in particular, saw a sharp 3.9% drop in production. Other sectors, such as petroleum products, food, and furniture, also cut output. Not all regions and industries are struggling.
Espírito Santo’s factory output jumped 16.2% in May, thanks to strong mining activity, especially iron ore. A few sectors, including mining, pharmaceuticals, and plastics, managed to grow despite the tough climate.
Compared to a year ago, Brazil’s industry is still 3.3% larger and 2.1% above its pre-pandemic level. But it remains 15% below its record high from 2011. Business leaders are not optimistic.
The main confidence index for industrial companies fell to 48.6 points in June, staying below the 50-point mark that signals optimism. Brazil’s factories matter because they provide jobs and drive exports.
When they slow down, it can mean fewer jobs and less money moving through the economy. The current slowdown shows that while high interest rates help fight inflation, they can also make life harder for businesses and workers.
As long as borrowing stays expensive and confidence remains low, Brazil’s industry will likely keep facing challenges. The next few months will show whether factories can adapt or if the slowdown will deepen.
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+0.46%
183,827.59
+0.46%
65,071.30
+0.20%
11,055.91
-0.73%
2,782,561
-0.59%
2,558.92
-0.79%
60,220.45
+0.32%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 183,827.59 | +0.46% | +21.85% | 182,991.13 | 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 |
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