UPDATE 1-Brazil industry retreats for 2nd straight month in April

Wed Jun 4, 2014 9:20am EDT

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(Add details from IBGE report, context)
    RIO DE JANEIRO, June 4 (Reuters) - Brazilian industrial
output fell in April as rising inventories and higher credit
costs contributed to a drop in the production of capital and
durable consumer goods.
    Industrial production slipped 0.3 percent in
April from March, government statistics agency IBGE said on
Wednesday, matching expectations in a Reuters survey of 23
analysts. 
    The number represents a further step back for Brazilian
industry following March's 0.5 percent fall and adds to worries
over manufacturing's drag on broader economic growth.
    Economists have been particularly worried about the recent
increase in unwanted inventories brought about by a 2.3 percent
output rise in January from December.
    Capital goods production fell 0.5 percent in April from
March, improving from a 4.0 percent fall in March from February.
    Intermediate goods such as textiles and chemicals retreated
0.2 percent, their first monthly decline since December, while
durable consumer goods such as furniture and home appliances
sank 1.6 percent.
    The one bright spot in April's numbers was semi- and
non-durable consumer goods such as shoes and food products,
which rose 0.4 percent.
    Manufacturers have consistently been the weakest link in
Brazil's economy as they struggle with competition from abroad,
high tax and labor costs, and poor infrastructure.
    Industrial production is expected to grow just 1.24 percent
in 2014, less than the 1.50 percent expansion forecast for
Brazil's economy as a whole, according to a weekly central bank
poll of about 100 economists. 
    A private survey on Monday showed Brazil's
manufacturing shrank at the fastest pace in 10 months in May.
 
    
  
    Of the 24 industrial sectors surveyed by IBGE, 12 shrank in
April from March, including metallurgy, wood products, clothing
and furniture.
    April's industrial production fell 5.8 percent from a year
earlier, also in line with the median estimate in
the Reuters survey. Estimates ranged from a 6.6 percent decline
to a 3.0 percent expansion.
    
   (For details on the IBGE industrial output figures see: here)
    
 (pct change)                    Apr/Mar    Apr'14/A
                                            pr'13
 Capital goods                   -0.5       -14.4
 Intermediate goods              -0.2       -4.5
 Consumer goods                  -0.8       -6.0
     Durable consumer goods      -1.6       -12.0
     Semi-durable and            0.4        -3.9
 non-durable consumer goods                 
 Industrial output               -0.3       -5.8
 
 (Reporting by Walter Brandimarte and Felipe Pontes; Writing by
Asher Levine Editing by W Simon)
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