UPDATE 1-Brazil industry takes yet another step back in May

miércoles 2 de julio de 2014 09:32 GYT
 

(Add details from IBGE report, context on challenges facing
Brazilian manufacturing)
    By Asher Levine
    RIO DE JANEIRO, July 2 (Reuters) - Brazilian industrial
output fell for the third straight month in May despite
government efforts to jumpstart manufacturing through a host of
stimulus measures.
    Industrial production in Brazil fell 0.6 percent
in May from April, government statistics agency IBGE said on
Wednesday, in line with the 0.55 percent decline forecast in a
Reuters survey of 24 analysts. Forecasts ranged from no change
to a 1.1 percent fall.
    The number represents a further step back for Brazilian
industry following April's 0.5 percent decline, revised downward
on Wednesday from a previously reported 0.3 percent drop, and
March's 0.5 percent fall. It was the first time Brazilian
industry retreated for three straight months since late 2011.
    Brazilian manufacturing has remained largely unresponsive to
a string of more than two dozen government stimulus initiatives
launched over the last three years as it struggles with fierce
competition from abroad, high tax and labor costs, and poor
infrastructure. 
    The recent industrial downturn has already cost nearly
30,000 manufacturing jobs in May according to government data
, while business confidence is at the lowest in five
years and high inflation remains a headache.
    "(This data) could lead to delayed investment decisions and
weaker growth expectations for the future," said Danilo Delgado,
an economist with Atico Asset Management in Rio de Janeiro.     
 
    Capital goods production fell 2.6 percent in May from April,
the third straight monthly decline, while intermediate goods
such as textiles and chemicals retreated 0.9 percent. Durable
consumer goods such as furniture and home appliances sank 3.6
percent.
    One bright spot in May's numbers was semi- and non-durable
consumer goods such as footwear and food products, which rose 1
percent.
  
    Industrial production is expected to shrink 0.14 percent in
2014 with Brazil's economy as a whole growing just 1.1 percent,
according to a weekly central bank poll of about 100 economists.
    A private survey on Monday showed Brazil's
manufacturing shrank at the fastest pace in 11 months in June.
    
    Of the 24 industrial sectors surveyed by IBGE, 15 shrank in
May from April, including petroleum derivatives, vehicle parts
and motors, and electronics.
    May's industrial production fell 3.2 percent from a year
earlier, also in line with estimates, which ranged
from a 4.9 percent decline to a 1.0 percent expansion.
    
   (For details on the IBGE industrial output figures see: here)
    
 (pct change)                    May/Apr    May'14/M
                                            ay'13
 Capital goods                   -2.6       -9.7
 Intermediate goods              -0.9       -2.8
 Consumer goods                  -0.3       -2.2
     Durable consumer goods      -3.6       -11.2
     Semi-durable and            1.0        0.8
 non-durable consumer goods                 
 Industrial output               -0.6       -3.2
 

 (Reporting by Rodrigo Viga Gaier, Felipe Pontes and Camila
Moreira; Writing by Asher Levine; Editing by W Simon and
Meredith Mazzilli)