UPDATE 1-Brazilian industry falls back into decline in September
(Adds details from IBGE, context) RIO DE JANEIRO, Nov 4 (Reuters) - Brazilian industrial output fell unexpectedly in September, marking a return to decline for the country's long-suffering manufacturers after two slightly positive months. Output at factories and mines fell a seasonally adjusted 0.2 percent in September from August, statistics agency IBGE said on Tuesday, defying expectations for a 0.2 percent gain in a Reuters survey of 28 analysts. The decline was the fifth in seven months. The numbers are likely to quell any remaining optimism that Brazilian industry is finally turning around after a 0.7 percent advance in July and 0.6 percent rise in August. Brazilian industry has contracted 2.9 percent in the year through September, IBGE said. Years of mediocre performance among local manufacturers have been difficult for the government to halt despite waves of stimulus measures and tax breaks. Most economists blame hard-to-fix structural problems, such as tougher competition from abroad, poor infrastructure at home, and high tax and labor costs. September industrial production was down 2.1 percent from a year earlier, worse than the 1.5 percent decline forecast in the Reuters poll. Brazil's economy entered a recession in the first half of the year, primarily due to a contraction in the manufacturing sector. Industrial output is expected to drop 2.17 percent in 2014 according to a central bank poll of economists released Monday. If industry continues to struggle it will weigh more heavily on employment, currently one of the brightest aspects of Brazil's economy, many analysts say. Capital goods production rose 1.9 percent in September from August, while intermediate goods such as textiles and chemicals dropped 1.6 percent. Durable consumer goods such as furniture and home appliances rose 8 percent. Purchasing managers' index data released on Monday showed Brazil's manufacturing activity continued to weaken in October as inventories remained high. (For details on the IBGE industrial output figures see - in Portuguese: here) (pct change) Sept/Aug Sept'14/Sept'13 Capital goods 1.9 -7.9 Intermediate goods -1.6 -1.7 Consumer goods 1.0 -0.5 Durable consumer goods 8.0 -7.3 Semi-durable and non-durable 0.8 1.6 consumer goods Industrial output -0.2 -2.1 (Reporting by Rodrigo Viga Gaier and Felipe Pontes; Writing by Asher Levine)
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