October 3, 2017 / 1:33 PM / a year ago

UPDATE 1-Brazil industrial output breaks four-month streak of gains in Aug

 (Updates throughout with additional information, context)
    By Bruno Federowski
    SAO PAULO, Oct 3 (Reuters) - Brazil's industrial output fell
unexpectedly in August, snapping four straight months of gains
as weather hampered sugar production, underscoring the sector's
uneven recovery from the deepest recession in a century.
    Industrial output fell 0.8 percent from July after seasonal
adjustments, government statistics agency IBGE said on Tuesday.
Economists had expected a flat reading, according to the median
forecast in a Reuters poll.           
    Scarce rains in the center-south drove sugar cane processors
to anticipate crushing activity in the prior months, weighing on
August output. Food production fell 5.5 percent, following a 9.3
percent increase in the prior three months.
    But auto production continued to rise in the month,
suggesting the outlook for a gradual improvement in
manufacturing activity remains intact.
    "This drop does not break the trend, it looks more like a
concentrated, one-off decline," IBGE economist André Macedo
    Industrial output rose 4 percent in August from the year
before, below economists' median forecast for a 4.8 percent
    The report highlights the differing fortunes for
manufacturers and consumers in Latin America's largest economy.
    Plagued by bloated inventories and heavy debt, industrial
firms have generally lagged a recent pickup in consumer spending
fueled by lower interest rates and slow inflation.             
    A central bank weekly survey of economists forecast
industrial output rising 1.05 percent in 2017 and 2.40 percent
in 2018.

 (Reporting by Bruno Federowski; Additional reporting by Rodrigo
Viga Gaier; Editing by Susan Thomas)
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