September 5, 2017 / 1:13 PM / in a year

UPDATE 1-Brazil industry output up in July for 4th straight month

 (Updates throughout with details, analyst comments)
    By Bruno Federowski
    SAO PAULO, Sept 5 (Reuters) - Brazil's industrial output
rose more than expected for a fourth straight month in July, the
latest sign of growing momentum as the economy emerges from its
deepest recession in a century.
    Industrial production expanded 0.8 percent from June after
seasonal adjustments and 2.5 percent from a year earlier,
statistics agency IBGE said on Tuesday.
    Economists had expected a 0.4 percent monthly increase and a
1.58 percent annual increase, according to the median forecast
in a Reuters poll. 
    Scarce rains in center-south Brazil boosted cane-crushing
activity in the period, providing a one-off boost to sugar and
ethanol output, IBGE said. Food production rose 2.2 percent, the
third straight increase. Production rose across industries, with
increases in 14 of 24 sectors tracked by IBGE.
    "Although the positive reading doesn't erase the losses seen
in the last two years, one can see an upward trajectory," wrote
IBGE economist André Macedo.
    The reading spells good news for a sector that for years
grappled with ailing demand, mounting debt and rising costs.
    Still, economists say a recovery among manufacturers may lag
consumers, who have recently accelerated spending thanks to
lower interest rates and slowing inflation.
    "All in all, this suggests that Brazil's industrial sector
got off to a decent start in the third quarter and bodes well
for the continuation of the economic recovery," Capital
Economics economist Neil Shearing wrote in a report.
    Industrial output is expected to grow 1 percent this year,
according to a central bank survey of economists.
 (Percent change)                                 m-m  y-y
 Capital goods                                    1.9  8.7
 Intermediate goods                               0.9  0.6
 Consumer Goods                                   0.6  4.9
 Durable consumer goods                           2.7  8.1
 Semi-durable and non-durable consumer goods      2.0  4.2
 Industrial output                                0.8  2.5
 (Reporting by Bruno Federowski; Editing by Frances Kerry)
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