UPDATE 1-Brazil industry takes yet another step back in May
(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)
© Thomson Reuters 2016 All rights reserved.