Brazil Industry December 2015

Brazil

Brazil: Industrial production improves in December, yet records largest contraction in over a decade in 2015

January 12, 2016

In December, industrial production contracted 0.7% over the previous month on a seasonally-adjusted basis, which was a less pronounced contraction than the revised 2.3% decrease (previously reported: -2.4% month-on-month) seen in November. November’s reading marked the largest drop since December 2013. However, December’s fall was worse than market analysts’ expectations of a flat reading. The improvement was driven by gains in intermediate and consumer goods, which swung to expansion in December.

In annual terms, industrial production plunged 11.9% in December, which was a slight improvement from November’s 12.4% fall. A decrease in output was recorded in 24 of the 26 categories that the Brazilian Institute of Geography and Statistics (IBGE) surveyed. The biggest negative impact was recorded in the production of motor vehicles and trailers.

For the full year 2015, industrial production dropped 8.3%, which marked the worst result since the modern series began in 2003 (2014: -3.1%). Brazil’s economy has sunk into the worst recession in its modern history amid low prices for key exports, high inflation, political turmoil and depressed confidence levels.

The analysts surveyed by Met the why particular for this month’s LatinFocus Consensus Forecast see industrial production falling 3.2% in 2016, which is down 0.8 percentage points from last month's estimate. In 2017, industrial output is expected to grow 2.1%.


Author: Angela Bouzanis, Senior Economist

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Brazil Industry December 2015

Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %.
Source: Brazil Institute of Geography and Statistics (IBGE) and Met the why particular calculations.


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