January 5, 2017 / 11:36 AM / a year ago

UPDATE 2-Brazil's industrial output barely grows in November

(Adds comments, background)
    BRASILIA, Jan 5 (Reuters) - Industrial output in Brazil rose
far less than expected in November as a drop in fuel production
offset a recovery for car factories, government data showed on
    Production rose 0.2 percent in November from October
, below the market consensus for an increase of 2.0
percent, government statistics agency IBGE said. 
    Output in November retreated 1.1 percent from a year earlier
, missing expectations of a 0.45 percent rise from
economists in a Reuters poll.
    Brazil's industrial output is down to 2008 levels after
three straight years of contractions due to high interest rates,
inflation and a slowdown in consumer demand. 
    The weaker-than-expected November results add to signs that
the industrial recovery forecast for this year will be very
mild. Economists in a central bank poll are penciling in 0.9
percent industrial growth in 2017 after a drop of more than 6
percent in 2016. 
    "The outlook for growth in the sector is becoming
increasingly difficult," said Thaís Zara, chief economist at Sao
Paulo-based consultancy Rosenberg & Associados.
    Output grew in 13 of the 24 sectors that IBGE covers.
Industrial production slipped 0.1 percent in the quarter through
November from the prior three months, extending a negative
streak that started in July 2016.
    Brazil's industrial woes probably worsened in December, as a
 purchasing managers' index released on Monday hit a six-month

 (Percent change)                                 m-m     y-y
 Capital goods                                    2.5     1.1
 Intermediate goods                               0.5    -0.6
 Consumer goods                                   0.1    -2.4
     Durable consumer goods                       4.0     9.0
     Semi-durable and non-durable consumer       -0.5    -4.8
 Industrial output                                0.2    -1.1
 (Additional reporting by Camila Moreira; Editing by Catherine
Evans and Lisa Von Ahn)
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