UPDATE 1-Brazil industry retreats for 2nd straight month in April
(Add details from IBGE report, context) RIO DE JANEIRO, June 4 (Reuters) - Brazilian industrial output fell in April as rising inventories and higher credit costs contributed to a drop in the production of capital and durable consumer goods. Industrial production slipped 0.3 percent in April from March, government statistics agency IBGE said on Wednesday, matching expectations in a Reuters survey of 23 analysts. The number represents a further step back for Brazilian industry following March's 0.5 percent fall and adds to worries over manufacturing's drag on broader economic growth. Economists have been particularly worried about the recent increase in unwanted inventories brought about by a 2.3 percent output rise in January from December. Capital goods production fell 0.5 percent in April from March, improving from a 4.0 percent fall in March from February. Intermediate goods such as textiles and chemicals retreated 0.2 percent, their first monthly decline since December, while durable consumer goods such as furniture and home appliances sank 1.6 percent. The one bright spot in April's numbers was semi- and non-durable consumer goods such as shoes and food products, which rose 0.4 percent. Manufacturers have consistently been the weakest link in Brazil's economy as they struggle with competition from abroad, high tax and labor costs, and poor infrastructure. Industrial production is expected to grow just 1.24 percent in 2014, less than the 1.50 percent expansion forecast for Brazil's economy as a whole, according to a weekly central bank poll of about 100 economists. A private survey on Monday showed Brazil's manufacturing shrank at the fastest pace in 10 months in May. Of the 24 industrial sectors surveyed by IBGE, 12 shrank in April from March, including metallurgy, wood products, clothing and furniture. April's industrial production fell 5.8 percent from a year earlier, also in line with the median estimate in the Reuters survey. Estimates ranged from a 6.6 percent decline to a 3.0 percent expansion. (For details on the IBGE industrial output figures see: here) (pct change) Apr/Mar Apr'14/A pr'13 Capital goods -0.5 -14.4 Intermediate goods -0.2 -4.5 Consumer goods -0.8 -6.0 Durable consumer goods -1.6 -12.0 Semi-durable and 0.4 -3.9 non-durable consumer goods Industrial output -0.3 -5.8 (Reporting by Walter Brandimarte and Felipe Pontes; Writing by Asher Levine Editing by W Simon)
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