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Brazil: Industrial production plummets in November

2016/01/14

In November, industrial production contracted 2.4% over the previous month on a seasonally-adjusted basis, which was a additional pronounced contraction than the revised 0.6% decrease (before reported: -0.7% month-on-month) seen in October.

The result was the major drop since December 2013 and worse than market analysts’ expectations of a 0.9% fall. The figure was driven by a bigger fall in the production of intermediate goods.

In annual terms, industrial production plunged 12.4% in November, which was a deterioration from October’s revised 11.1% fall (before reported: -11.3% year-on-year) and marked the worst reading in over six years. 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.

The trend continued to point downward in November, with annual average increase in industrial production falling from October’s minus 7.0% to minus 7.5%. Annual average increase has followed a broad downward trend since March 2014.
The analysts surveyed by FocusEconomics for this month’s LatinFocus Consensus Estimate see industrial production falling 2.4% in 2016, which is unchanged from last month's estimate. In 2017, industrial output is expected to grow 2.2%.

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