UPDATE 1-Brazilian industry grows slightly but outlook still grim

jueves 2 de octubre de 2014 09:09 GYT

(Adds details from IBGE, quote, context)
    By Asher Levine
    RIO DE JANEIRO, Oct 2 (Reuters) - Brazilian industrial
output rose for the second straight month in August, though not
by enough to mark a turnaround for the country's long-suffering
    Output at factories and mines rose a seasonally
adjusted 0.7 percent in August from July, statistics agency IBGE
said on Thursday, surpassing expectations of a 0.1 percent gain
in a Reuters survey of 25 analysts. The increase was identical
to July's advance, which came after five straight months of
    Still, the numbers were not enough to spark optimism that
Brazilian industry is finally turning around after years of
mediocre performance caused by tougher competition from abroad,
poor infrastructure at home, and high tax and labor costs.
    "It's an improvement from a low base of comparison. The two
months don't even make up for the 1.6 percent decline we had in
June," said Andre Macedo, an economist with IBGE. "We need a
more consistent shift. The data compared to last year are still
very bad."
    August industrial production was down 5.4 percent from a
year earlier, slightly better than the 5.7 percent
decline forecast in the Reuters poll.
    Brazil's economy entered a recession in the first half of
the year, primarily due to a contraction in the manufacturing
sector despite a string of tax breaks and other government
    Industrial output is expected to drop 1.95 percent in 2014
according to a central bank poll of economists released Monday,
weaker than the 1.7 percent yearly decline forecast just a month
ago. If industry continues to struggle it will weigh more
heavily on employment, currently one of the brightest aspects of
Brazil's economy, many analysts say.
    Capital goods production remained unchanged in August from
July, while intermediate goods such as textiles and chemicals
advanced 1.1 percent. Durable consumer goods such as furniture
and home appliances dropped 3 percent.
    Purchasing managers' index data released on Wednesday showed
Brazil's manufacturing activity returned to its weakening trend
in September as the shaky economy and uncertainty over Sunday's
presidential election led businesses to put off purchases of new
capital goods. 

    (For details on the IBGE industrial output figures see - in
Portuguese: here)

 (pct change)                 Aug/July     Aug'14/Aug'13
 Capital goods                0.0          -13.4
 Intermediate goods           1.1          -3.3
 Consumer goods               -0.8         -6.7
     Durable consumer goods   -3.0         -17.9
     Semi-durable and         -0.8         -3.1
 non-durable consumer goods                
 Industrial output            0.7          -5.4
 (Reporting by Rodrigo Viga Gaier and Felipe Pontes; Writing by
Asher Levine, Editing by W Simon and Chizu Nomiyama)