Industrial production drops 1.3% and loses pre-pandemic level – News

Industrial production in Brazil fell by 1.3% in July and lost its pre-new coronavirus pandemic, according to data released this Thursday (2), by the IBGE (Brazilian Institute of Geography and Statistics).

With the result, the industry accumulates a fall of 1.5% in the months of June and July, after a rise of 1.2% in May, when the sector interrupted three consecutive months of fall, according to data from the PIM (Monthly Industrial Survey).

In 2021, industrial production accumulates an increase of 11% and, in twelve months, of 7%. With the July result, industrial production was 2.1% below the pre-pandemic level of February 2020.

The manager responsible for the research, André Macedo, explains that the industry’s performance still reflects the effects of the pandemic in the sector. “At the beginning of the year, there were closures and greater sanitary restrictions in certain locations, which affected the production process”, he highlights.

Macedo points out that the advance of vaccination and the relaxation of restrictions made the sector feel the “effects of higher costs and the disarray of the entire production chain”. He also recalls that, in January 2021, industrial production reached 3, 5% above the pre-pandemic threshold.

Sectors

In July, two of the four major economic categories and 19 of the 26 subsectors surveyed showed a decline in productive activity. One of the most significant negative influences came from the beverage sector, which interrupted three consecutive months with consecutive positive rates, when it accumulated an increase of 11.7%, and fell by 10.2%.

Another sector that pressured the result was food products, with a drop of 1.8%, the second in a row, accumulating a loss of 3.8% in the period. “People have difficulty in getting a job, with an important contingent outside the labor market, job precariousness and a retraction in the mass of income”, highlights Macedo.

There is also the impact of inflation on reducing consumption. “The result of the industry is within the scope of the results of income, employment and inflation shown by the other surveys”, observes the researcher.

Other important negative contributions to the result of industry came from the sectors of automotive vehicles, trailers and bodies (-2.8%), machinery and equipment (-4%), other transport equipment (-15.6%) and extractive industries (-1.2%).

Among the seven activities with growth in production, coke, petroleum products and biofuels (2.8%) exerted the main positive impact, with the third consecutive month of increase and accumulating, in this period, a 10.2% increase.

Among the major economic categories, there were falls in durable consumer goods (-2.7%) and intermediate goods (-0.6%). The sectors of capital goods (0.3%) and semi and non-durable consumer goods (0.2%), in turn, had positive results.