UPDATE 1-Brazil's industrial output dropped for 4th month in June

viernes 1 de agosto de 2014 09:13 GYT
 

(Adds table, details from IBGE report, context)
    By Rodrigo Viga Gaier
    RIO DE JANEIRO, Aug 1 (Reuters) - Brazilian industrial
output dropped in June for a fourth straight month as automobile
production plunged, in a further  sign of the downturn in the
country's economy, Latin America's largest.
    Output at factories and mines in June fell a
seasonally adjusted 1.4 percent from May, slightly less than
expected, statistics agency IBGE said on Friday.
    The last time industrial output shrank for four straight
months was in mid-2010. May's drop was also revised to 0.8
percent, from a previously reported 0.6 percent.
    The soccer World Cup, which ran from June 12 to July 13, was
a setback for the factories as some cities ordered holidays
ahead of major matches, reducing the number of working days. But
it was not the single reason for the drop.
    "The Cup only added fuel to the industry's downturn, which
has been caused by high inventories, low confidence, weak
domestic demand, unfavorable scenarios overseas and tight
credit," IBGE economist André Macedo told journalists.
     Manufacturing has been the weakest link in Brazil's economy
despite a string of tax breaks and other government subsidies.
Industrial output is expected to drop more than 1 percent in
2014, which could tip Brazil into a recession and send
unemployment higher, according to many economists.
    Brazilian factories, particularly car makers, were also
affected by the recession in Argentina. Automobile production
dropped 12.1 percent in June from May, driving output of durable
consumer goods down by a steep 25 percent, IBGE said in a note.
    The economic downturn in Argentina is likely to worsen after
it defaulted on its debt for the second time in 12 years.
 
    The industrial downturn cost nearly 60,000 manufacturing
jobs in May and June alone, according to government data
.
    June industrial production was down 6.9 percent from a year
earlier.

    (For details on the IBGE industrial output figures see - in
Portuguese: here)
 (pct change)                    June/May    June'14/June'13
                                             
 Capital goods                   -9.7        -21.1
 Intermediate goods              -0.1        -2.9
 Consumer goods                  -7.9        -10.7
     Durable consumer goods      -24.9       -34.3
     Semi-durable and            -1.3        -3.0
 non-durable consumer goods                  
 Industrial output               -1.4        -6.9
 

 (Writing by Silvio Cascione; Editing by Steve Orlofsky)