UPDATE 3-Brazil industry takes a step backward in 2012
* Industrial output declines 2.7 pct in 2012 - government * Production stagnant in December from November * Capital goods production decline sharply as investment lags * December production falls 3.6 pct compared to 2011 By Asher Levine SAO PAULO, Feb 1 (Reuters) - Brazil's industrial output shrank in 2012 despite a barrage of government measures to stimulate a revival, leading to concerns that Latin America's largest economy could post yet another quarter of disappointing growth. Brazilian industrial output failed to advance in December, posting 0.0 percent growth from November, and contracted 3.6 percent in December from a year earlier, government statistics agency IBGE said on Friday. With December's data, industrial output in Brazil closed 2012 with a 2.7 percent contraction compared with 2011. It was the first yearly decline since 2009 and nearly the same level as early 2010. "The data was quite bad, despite showing stability," said Thais Marzola Zara, chief economist with Rosenberg & Associados in Sao Paulo. She said the data would bring a slightly negative carryover for 2013. Consistently meager industrial output has weighed on the outlook for Brazil's economy, which most economists expect to have grown no more than 1 percent last year. "The weakness of industry towards the end of last year suggests that Q4 GDP data could disappoint," wrote Neil Shearing, chief emerging markets economist with Capital Economics in London on Friday. President Dilma Rousseff's government has attempted to boost the sector through a series of stimulus measures, trade barriers and tax breaks, although the production figures suggest Brazil's manufacturers responded little last year, if at all. Much of the blame for the three-year long period of mediocre industrial growth has been placed on weak global demand and the structural challenges facing manufacturers in Brazil. Chief among them is labor. Unemployment fell to an all-time low in December, piling additional pressure on manufacturers already struggling with low productivity, high taxes, and infrastructure bottlenecks. "
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