Brazil Economy Update: Highest Industrial Output Since ’95

Brazil’s January industrial output data showed the strongest growth year-on-year for that month since 1995, signaling a continuing strong recovery.

Industrial output in January compared to January last year ramped up 16.0% higher, according to data from the Brazilian Census Bureau, or IBGE released Thursday.

IBGE said Brazil’s industrial production was now back to a level last seen in January 2008.
Analysts polled by the Estado news agency expected a 16.30% rise year-on-year with their forecasts ranging between 14.70% and 18.60%.

January’s 16% increase was the highest since 1995 when output leapt 16.9%, IBGE’s coordinator for industry, Andre Macedo said.

More indicative of Brazil’s recovery was January’s industrial output comparison with December, which rose 1.1%, exactly in line with market forecasts.

IBGE data showed an 8.6% leap in the production of consumer durables in January compared to December, but also a massive 36.4% increase on the year-on-year figure.

Capital goods production slipped 0.1% in the month-on-month comparison but was 12.8% higher on the year-ago month.

Within the capital goods segment, Brazil’s booming construction equipment sub-sector, was outstanding with a 202.6% expansion.

Brazil’s auto sector led the way in influencing January’s rise in industrial output, accounting for 41.4% of the overall figure.

According to IBGE amid other industries showing the best performance in January were metal products, up 12% and electrical and communications equipment, which jumped 14.3%.

Brazil’s January output rise followed two negative months of growth interrupting ten consecutive monthly increases.

January’s increase wiped out the impact of the two previous months’ negative performance, IBGE said in a statement.

During 2009 Brazil’s industrial growth declined 7.4% compared to a rise of 3.1% in 2008.

Tags: brazil, economy, IBGE, industrial output, rio de janeiro