February 1, 2013 / 11:31 AM / 5 years ago

UPDATE 1-Brazil industry declines in 2012, despite gov't efforts

* 2012 industrial output declines 2.7 pct from 2011
    * Dec industrial output falls 3.6 pct from year earlier
    * Capital goods decline sharply as investment lags

    By Asher Levine
    SAO PAULO, Feb 1 (Reuters) - Brazilian industrial output
failed to advance in December, posting 0.0 percent growth from
November, capping a year in which manufacturing slumped despite
government efforts to stimulate its revival.
     Output from Brazilian factories and mines 
contracted 3.6 percent in December from a year earlier,
government statistics agency IBGE said on Friday, better than
the 4.7 percent decline forecast in a Reuters survey.
    The data follows a 1.1 percent year-over-year contraction in
November, revised down from a previously-reported 1 percent on
    With December's data, industrial output in Brazil closed
2012 with a 2.7 percent contraction compared with 2011, and
remained at nearly the same level as early 2010.
    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, as well
as 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. 
    In addition, concerns over government intervention in the
private sector and lackluster economic growth in Brazil have
sapped investor confidence, leading to a decline in capital
goods production, which was the biggest contributor to
December's fall.
    December's industrial production failed to expand from
November, better than the 0.35 percent drop forecast
in the survey. Forecasts for the monthly change ranged from a
drop of 1.8 percent to an increase of 0.3 percent.
    The decline in industrial production from November to
October was revised to 1.3 percent on Friday, from a previously
reported 0.6 percent. 
    Of the 27 industrial sectors surveyed by IBGE, 14 contracted
in December from November, including machinery and office
    In broader industrial categories, production of capital
goods fell 0.8 percent in December from November, while durable
consumer goods fell 0.5 percent and intermediate goods dropped
0.1 percent.

 (pct change)                Dec/Nov  Dec12/Dec11  2012/2011
 Capital goods                  -0.8        -14.7      -11.8
 Intermediate goods             -0.1         -2.5       -1.7
 Consumer goods                  0.5         -1.4       -1.0
   Durable consumer goods       -0.5         -3.5       -3.4
   Semi-durable and              0.9         -0.8       -0.3
 non-durable consumer goods                        
 Industrial output               0.0         -3.6       -2.7
0 : 0
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