Brazil’s industrial output falls for the second straight month in July

Brazil’s Industrial Production Index (IPI) dropped by 1.3% m/m in July, seasonally adjusted, amid lower demand for industrial products, a shortage of inputs, and growing costs for producers.

According to the Brazilian Institute of Geography and Statistics (IBGE), which conducts the survey, the segments of food and beverages had the largest impact on the overall index.

The production of beverages fell by 10.2% m/m in July, while the production of food declined by 1.8% m/m, as the growing inflation, lower income, and high unemployment have eroded households' purchasing power.

Other sectors that saw declines were vehicles (-2.8% m/m), machines and equipment (-4% m/m), other transport equipment (-15.6% m/m) and the extractive industry (-1.2% m/m). On a yearly basis, however, the overall IPI grew by 1.2% y/y, reflecting a low base effect due to the severe impact of the first wave of the pandemic.

Further data and analysis on Brazil’s economy are available on the CEIC Brazil Economy in a Snapshot – Q2 2021 report.