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Manufacturing remains the weakest link of the Brazilian economy

Wednesday, March 12th 2014 - 07:35 UTC
Full article 13 comments
The pharmaceutical and machinery sectors expanded in January  The pharmaceutical and machinery sectors expanded in January

Industrial production in Brazil rose 2.9% in January from December, government statistics agency IBGE said on Tuesday led by a jump in capital goods production.

 January's improvement comes just one month after Brazilian industry posted its steepest monthly decline since December 2008. December's industrial production drop from November was revised on Tuesday to an even further 3.7% from 3.5% previously.

Manufacturing has consistently been the weakest link in Brazil's commodities-strong economy as companies struggle with competition from abroad, high tax and labor costs, and poor infrastructure.

While capital goods production rose 10% in January from December, its base of comparison was low following a 12.2% drop in December, revised down from a 11.6% decline by IBGE on Tuesday.

IBGE also revised December's decline from a year earlier to 2.5% from 2.3% previously.

Of the 27 industrial sectors surveyed by IBGE, 17 expanded in January from December, including pharmaceuticals, office equipment and machinery.

Automobile production rose for the first month in four, climbing 8.7% from December as workers returned from collective vacations. In broader industrial categories, consumer goods rose 2.3% from December while intermediate goods advanced 1.2%.

January's industrial production shrank 2.4% from a year earlier.

Economists expect industrial output in Brazil to grow 1.57% this year, according to the median forecast in a central bank poll released Monday. A week earlier, the poll predicted 1.8% growth for the year. The performance of the manufacturing sector is not good news for the administration of Dilma Rousseff who is bidding for re-election next October, even when opinion polls have her comfortably ahead.

Categories: Economy, Brazil.

Top Comments

Disclaimer & comment rules
  • Brasileiro

    The news is very positive. But the headline is extremely negative.

    The negative ads sponsored by the media and speculators from Anglosphere is harmful to themselves:

    First - Stock market has almost zero weight in our economy. The largest investors are speculators from Anglosphere.

    Second - Fixed investments that the Anglosphere do not make in Brasil (due to the ignorance of our real economy or excessive pessimism), other countries do.

    ......i need to go

    continue in another hour....

    Mar 12th, 2014 - 12:06 pm 0
  • Jack Bauer

    “Manufacturing has consistently been the weakest link in Brazil's commodities-strong economy as companies struggle with competition from abroad, high tax and labor costs, and poor infrastructure”....

    This is nothing new ; neither is Brasileiro's stupid remark...If the news is positive, then why is the headline negative ??
    His comments on the “angloshere” and the “stock market” could only have come from an idiot like himself (or herself ??) .
    And ....“.....i need to go”.....and back in an hour ??? Ah, I get it, go and put your lipstick on and bend over for your next client.....

    Mar 12th, 2014 - 07:24 pm 0
  • Tik Tok

    #1 I know you think the sun shines every day in Brazil but there really are a lot of storm clouds on the horizon. The reality is Brazil is stagnating and going backwards relative to many other countries in the region. The political powers that be have really cocked things up.
    http://www.cnbc.com/id/101486940

    Mar 12th, 2014 - 10:17 pm 0
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