UPDATE 1-Brazil industrial output posts biggest decline since 2009
(Adds details from IBGE report, context) RIO DE JANEIRO, Feb 3 (Reuters) - Brazilian industrial output closed 2014 with its biggest yearly decline since the global financial crisis as a flatlining economy battered business confidence and drove a sharp drop in capital goods production. Output at factories and mines fell 3.2 percent in 2014 from 2013, statistics agency IBGE said on Tuesday, worse than the 3 percent drop forecast in a recent central bank poll of economists. Capital goods production, which tends to track business growth expectations, fell 9.6 percent in the year. Durable goods production, which follows consumer confidence more closely, dropped 9.2 percent. Consumer confidence plunged in January to the lowest level since the data series began, while Brazilian industrial confidence remains near historic lows. Most economists say the steady decline of Brazilian industry over the past three years is not about to reverse course in the short-term as a drop in commodities prices and greater fiscal tightening weighs on the nation's economy, which some analysts expect will fall into recession this year. Hard-to-fix structural problems, such as tougher competition from abroad, poor infrastructure at home, and high tax and labor costs, are widely cited as further barriers to growth among local manufacturers. December industrial production fell 2.8 percent from November, IBGE said, surpassing the survey's estimate for a 2.5 percent decline. It was the fourth straight month in which the number came in worse than market estimates. Production fell in 17 of 24 industrial segments on a monthly basis, with automobile and equipment manufacturing contributing the most to the decline. Durable goods retreated 2.2 percent from November and 9.7 percent from December 2013 as heavier household debt loads and higher interest rates sap demand for big-ticket items. Production dropped 2.7 percent in December from December 2013, greater than the median forecast of a 2.4 percent decline in a Reuters survey of 27 analysts. For details on the IBGE industrial output figures in Portuguese, click bit.ly/1BRJdPt (Percent change) Dec/Nov Dec'14/Dec'13 Capital goods -23.0 -11.9 Intermediate goods -0.8 -1.5 Consumer goods -2.0 -3.2 Durable consumer goods -2.2 -9.7 Semi-durable and -1.7 -1.3 non-durable consumer goods Industrial output -2.8 -2.7 (Reporting by Pedro Fonseca and Rodrigo Viga Gaier; Writing by Asher Levine; Editing by Robin Pomeroy and Chizu Nomiyama)
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