UPDATE 1-Brazil industrial production drops more than expected in March

miércoles 6 de mayo de 2015 08:30 GYT

(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
    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)