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UPDATE 1-Brazil industrial output flat in Aug, capital goods up
October 2, 2013 / 1:13 PM / 4 years ago

UPDATE 1-Brazil industrial output flat in Aug, capital goods up

* Aug output unchanged from July, short of estimates
    * Capital goods output rises 2.6 pct


    By Asher Levine
    SAO PAULO, Oct 2 (Reuters) - Brazilian industrial output
fell short of expectations in August though capital goods
production advanced, suggesting businesses are regaining
optimism over economic growth. 
    Industrial production in Brazil was unchanged in
August from July, government statistics agency IBGE said on
Wednesday, falling short of the 0.15 percent expansion forecast
in a Reuters survey of 22 analysts. 
    IBGE also revised July's data to show a 2.4 percent decrease
from July, down from a previously reported 2 percent decline.
    Brazilian industry has had a mild recovery in 2013, rising
1.6 percent in the first eight months from the same period last
year, IBGE said. Growth has come in starts and stops, however,
as businesses continue to struggle with high taxes, poor
infrastructure and high labor costs.
    Stronger manufacturing and construction activity helped lead
Brazil's economic growth in the second quarter to its fastest in
over three years, following several stimulus measures such as
tax breaks and subsidized loans. 
    A 2.6 percent rise in capital goods production in August
from July suggests businesses are looking forward to stronger
economic growth, and investing accordingly. 
    On an annual basis, capital goods production has risen for
an eighth straight month.
    Automobile output in Brazil rose 9.0 percent in
August from July, boosted by stronger foreign demand as a result
of a weaker currency, which makes locally made goods cheaper in
dollars. 
    Brazil's currency, the real, has weakened 7.5 percent
against the dollar this year.
    
  
    August's industrial production shrank 1.2 percent from a
year earlier, more than the 0.75 percent decrease
forecast in the Reuters survey. Estimates ranged from a 1.8
percent contraction to a 0.3 percent increase.
    July's numbers were revised to a 1.7 percent rise from July
2012, IBGE said, down from a previously reported 2 percent.
     A closely watched survey of purchasing managers on Monday
suggested Brazilian industry remained stable in September. The
HSBC PMI index rose to a seasonally adjusted 49.9
in September from 49.4 in August, near the 50 mark separating
contraction from expansion. 
    After a 2.7 percent contraction in 2012, economists expect
industrial output to grow 2.07 percent this year, according to
the median forecast in a central bank poll. One month ago the
survey forecast industrial growth of 2.11 percent.
    Of the 27 industrial sectors surveyed by IBGE, 15 expanded
in August from July, including foods and automobiles, while
pharmaceutical goods extended a recent decline.
    In broader industrial categories, consumer goods fell 0.6
percent, while intermediate goods advanced 0.6 percent.

 (pct change)                   Aug/Jul    Aug/Aug'12
                                                     
 Capital goods                        2.6        11.8
 Intermediate goods                   0.6        -2.0
 Consumer goods                      -0.6        -2.8
     Durable consumer goods           0.2        -6.3
     Semi-durable and                -0.3        -1.6
 non-durable consumer goods                
                                                     
 Industrial output                    0.0        -1.2

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