Brazil’s industrial production falls by 3.9% y/y in September

Brazil’s industrial production index (IPI) decreased by 3.9% y/y in September 2021, following a decline of 0.7% y/y in the previous month, reflecting the shortage of inputs and higher costs of electricity and raw materials. According to the Brazilian Institute of Geography and Statistics (IBGE), which conducts the survey, the subindex of durable consumption goods recorded the highest decline in September, by 22.3% y/y, followed by semi and non-durable consumption goods (-5% y/y) and intermediate goods (-3.6% y/y). The production of capital goods, otherwise, grew by 15% y/y in the ninth month of 2021, on the back of high capacity utilisation in manufacturing.

Among industrial segments, the IPI declined for food products (-11.9% y/y), automotive (- 7.9% y/y), coke, petroleum products and biofuels (- 4.6% y/y) and computers, electronic and optical products (- 18.7% y/y). Otherwise, the IPI increased for machines and equipment (+ 14.5% y/y), metallurgy (+ 10% y/y) and the extractive industry (+ 3.2% y/y).

Brazil’s industrial production index (IPI) decreased by 3.9% y/y in September 2021

Despite the fast pace of vaccination in the country, the Brazilian industrial sector may face headwinds in the next months, as the economy struggles with high unemployment and growing inflation. The CEIC Leading Indicator for Brazil fell below 90 in October, for the first time since June 2020, and the local central bank, after rising the benchmark interest rate by 1.5pp to 7.75% in October 27, declared the intention to raise the rate by the same magnitude, to 9.25% in December. Read more.

Brazil’s IPI growth is updated monthly, available from January 2003 to September 2021. The data reached an all-time high of 34.8% y/y in April 2021 and a record low of -27.7% y/y in April 2020.