MercoPress. South Atlantic News Agency

Brazilian industry contracts 12.4% in the year to November; auto production down 23%

Output of cars, light vehicles, trucks and buses tumbled 30% in December to 204,000 units. For the full year, production was down 23% at 2.43 million units.

Brazilian industry contracted in November, breaking all negative estimates as the country’s worst recession in decades deepened. Industrial production declined 2.4% from October in seasonally adjusted terms and 12.4% from November 2014, the Brazilian Institute of Geography and Statistics, or IBGE, said.

 A survey of economists by the local Agência Estado newswire had produced a median estimate of a 0.9% decline in month-on-month terms, with the worst forecast calling for a 1.8% drop.

Struggling with poor infrastructure, rigid labor laws, unproductive workers and crushing bureaucracy, Brazilian manufacturers and other industries are at the forefront of the country’s myriad economic troubles.

Economists surveyed last week by the central bank estimated that industrial production contracted by 7.8% in 2015 and would tumble an additional 3.5% this year. November was the sixth consecutive month of lower output.

This week also the auto-industry association Anfavea reported a sharp decline in vehicle output for December, suggesting the bad news is likely to continue.

Output of cars, light vehicles, trucks and buses tumbled 30% in the final month of 2015 from a year earlier, to 204,000 units. For the full year, production was down 23% at 2.43 million units.

Vehicle sales also plummeted, as Brazil’s high inflation and interest rates discouraged buyers. Sales plunged 38% in December to 370,000 units and finished 2015 down 27% at 2.57 million units.