May 3, 2016 / 1:12 PM / 2 years ago

Brazilian industrial output rises at fastest pace since 2014

By Silvio Cascione
    BRASILIA, May 3 (Reuters) - Brazil's industrial production
rebounded in March, rising at its fastest pace in more than two
years and fueling hopes that the country's prolonged recession
was nearing an end. 
    Industrial output grew 1.4 percent in March from February
after seasonal adjustments, government statistical
agency IBGE said on Tuesday. That was the biggest monthly rise
since January 2014 and followed a 2.7 percent drop in February.
    It was, however, slightly below the median forecast of a 1.6
percent increase in a Reuters poll of economists. 
    Output was down 11.4 percent in March from the year-earlier
period. That compared to a 9.8 percent decline in
the 12 months through February.
    Production increased in half of the 24 sectors covered by
the IBGE survey. The food processing sector gained 4.6 percent,
erasing the entire 2.1 percent loss it saw in the first two
months of the year.
    Capital goods manufacturers also ramped up production,
boosted by a recent currency drop that made Brazilian exports
more competitive in global markets. Production of machinery and
equipment rose 8.5 percent in March, IBGE said.
    Brazilian industry has shrunk to its 2008 level as the
country struggles with what is likely its longest and deepest
recession in more than a century. A private survey of purchasing
by managers on Monday suggested March's rebound could be
short-lived though, with an index of activity 
falling to its lowest level in seven years. 
    A separate survey by the National Confederation of Industry
of Brazil showed a growing concern among managers about tight
credit conditions, as interest rates remain at near a 10-year
high. Still, inventories fell for a fifth straight month in
March, raising the possibility of an accelerated recovery when
demand picks up.
 (Percent change)                      m-m              y-y
 Capital goods                         2.2            -24.5
 Intermediate goods                    0.1            -10.9
 Consumer goods                        3.2             -8.7
     Durable consumer goods            0.3            -24.3
     Semi-durable and                  0.9             -3.8
 non-durable consumer goods                 
 Industrial output                     1.4            -11.4


 (Reporting by Silvio Cascione; Editing by Paul Simao)
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