Industrial production falls for the sixth consecutive month in Brazil

Brazilian industrial production dropped 0.2% in November 2021, compared to October, reported this Thursday (6) the IBGE (Brazilian Institute of Geography and Statistics). It is the sixth consecutive drop of the indicator.

The result represents another sign of the fragility of the economy in the fourth quarter of last year. With the new negative performance, industrial production was 4.3% below the pre-pandemic level of February 2020, pointed out the IBGE.

The November data came at a lower level than expected by the market. Analysts consulted by the Bloomberg agency projected an increase of 0.1%.

The IBGE also reported that, in relation to November 2020, factory production fell by 4.4%. In this cut, analysts’ estimates signaled a smaller retraction, of 4.1%.

André Macedo, manager of the IBGE survey, believes that the industrial sector is affected by a set of difficulties. Part of it is related to the pandemic, which caused a shortage of inputs and increased the cost of production.

“In addition, the industry suffers from high interest rates and low demand, impacted by high inflation and the precariousness of employment conditions, since, with lower income, workers consume less”, adds the analyst.

Until November, industrial production accumulated a high of 4.7% last year. In 12 months, there was growth of 5%. Rates, however, were already higher during the pandemic.

The decrease of 0.2% from October to November 2021 was accompanied by 12 of the 26 surveyed branches in the industry.

Among activities, the most important negative influences came from rubber and plastic products (-4.8%), which lost all the expansion accumulated in the months of September and October (3.5%), and metallurgy (- 3%), which marked the third consecutive fall, accumulating a loss of 7.7% in the period.

Other relevant negative contributions came from metal products (-2.7%), beverages (-2.2%), coke, petroleum products and biofuels (-0.6%), perfumery, soaps, cleaning products and personal care products (-4.5%) and miscellaneous products (-4.5%).

Even with the process of reopening the economy, after greater restrictions to stop Covid-19, industrial production began to show signs of fragility in the country.

The scarcity of supplies is still identified as a problem that affects part of the factories. The automotive sector is among the most affected by the situation. The lack of components is associated with the pandemic, which has misaligned global production chains.

To complicate the picture, shortages have been accompanied by rising prices. In November 2021, industry inflation was 1.31%, according to the IPP (Producer Price Index).

The index is also calculated by the IBGE. In 12 months, the IPP skyrocketed to 28.86%. The indicator measures the variation in prices at the entrance of the factories, without the effect of taxes and freight.