UPDATE 1-Brazil industrial production drops more than expected in March
(Adds details from IBGE report) RIO DE JANEIRO, May 6 (Reuters) - Brazilian industry shrank more than expected in March as Latin America's largest economy continues to sink toward a recession. Industrial production in Brazil dropped 0.8 percent in March from February, government statistics agency IBGE said on Wednesday. That surpassed the median estimate for a 0.7 percent decline in a Reuters survey of 29 analysts. Most economists say the steady erosion of Brazilian industry over the past three years is not about to reverse course in the short term. A drop in commodities prices and greater fiscal tightening is weighing on the nation's economy, which many analysts expect to fall into recession this year. Hard-to-fix structural problems, such as low productivity, poor infrastructure at home and high tax and labor costs are widely cited as further barriers to growth among local manufacturers. Production dropped in 14 of 24 industrial segments on a monthly basis, with automobile manufacturing contributing the most to the decline. Durable consumer goods retreated 3.1 percent from February and 6.6 percent from March 2014 as heavier household debt loads and higher interest rates sapped demand for big-ticket items. Production retreated 3.5 percent in March from a year earlier, more than the median forecast for a 3.0 percent decline. IBGE revised February's production decrease from January down to a 1.3 percent decline from a previously reported 0.9 percent drop. February's decrease from a year earlier was revised to 9.4 percent from 9.1 percent. (Percent change) Mar/Feb Mar'15/Mar'14 Capital goods -4.4 -12.4 Intermediate goods -0.2 -2.1 Consumer goods -1.1 -4.0 Durable consumer goods -3.1 -6.6 Semi-durable and -0.3 -3.1 non-durable consumer goods Industrial output -0.8 -3.5 (Reporting by Rodrigo Viga Gaier and Pedro Fonseca; Editing by Meredith Mazzilli)
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