UPDATE 1-Brazil's industry takes small step forward in January
(Adds table, details on truck production) RIO DE JANEIRO, March 4 (Reuters) - Industrial output in Brazil grew more than expected in January as truck factories resumed operations at idle production lines, reversing a small part of last year's sharp downturn. Output from Brazilian factories and mines rose a seasonally adjusted 2.0 percent from December, above market expectations for an increase of 1.5 percent, statistics agency IBGE said on Wednesday. Capital goods production jumped 9.1 percent from December, mostly due to higher truck production after workers returned from vacations at many plants, IBGE said. Industrial output had dropped 4.3 percent in the last two months of last year, and production levels are still nearly 9 percent below 2013's peak, the institute added, highlighting the chronic weakness of Brazil's manufacturing sector after years of stiff competition from abroad and rising labor costs. 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 poor logistics and infrastructure, and high tax costs are widely cited as the factors taming local manufacturing. Automakers such as Volkswagen, Mercedes Benz and General Motors have faced strikes since last year as they tried to reduce costs by cutting payrolls. Production rose in 13 of 24 industrial segments on a monthly basis, with food processing and machinery contributing the most to the rise. January industrial production fell 5.2 percent from a year earlier, IBGE said. (Percent change) Jan/Dec Jan'15/Jan'14 Capital goods 9.1 -16.4 Intermediate goods 0.7 -2.4 Consumer goods -1.1 -7.4 Durable consumer goods -1.4 -13.9 Semi-durable and non-durable -0.3 -5.3 consumer goods Industrial output 2.0 -5.2 (Reporting by Rodrigo Viga Gaier and Pedro Fonseca; Writing by Silvio Cascione Editing by W Simon)
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