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UPDATE 3-Brazil industry takes a step backward in 2012
February 1, 2013 / 1:10 PM / 5 years ago

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
    * 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
    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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