December 4, 2019 / 12:45 PM / 7 months ago

UPDATE 1-Brazilian industry keeps up its recovery in October

(Adds detail)

By Jamie McGeever

BRASILIA, Dec 4 (Reuters) - Industrial production in Brazil rose 0.8% in October, official figures on Wednesday showed, the third month in a row of growth and further evidence that the sector is steadily recovering from a steep decline earlier this year.

Data on Tuesday showed that industry was one of the main drivers behind Brazil’s stronger-than-expected pace of overall economic growth in the quarter, and these latest figures suggest that is continuing into the fourth quarter.

The 0.8% rise - the strongest for any October since 2012 - was higher than the 0.7% median estimate in a Reuters poll of economists, and brought the gains over the three straight months of growth to 2.4%, government statistics agency IBGE said.

Production was 1.0% higher compared with the same month a year ago, less than the 1.4% predicted in a Reuters poll.

According to IBGE, three of the four wider economic categories covered showed an increase in output, as did 14 of the 26 narrower sectors surveyed.

“This growth has been led by domestic demand and a slight improvement in the labor market,” said André Macedo, research manager at the IBGE.

“In no way does this recover previous losses, but it does show a change in the industrial sector’s direction, which until mid-year was negative.”

Production of consumer goods rose 1.0% on the month and 4.1% on the year, and durable goods production rose 1.3% and 6.9%, respectively, IBGE said.

Among the narrower sectors, the biggest contributers to the overall rise were food production, which rose 3.4% on the month, pharmaceutical and related products, which rose 11.2%, IBGE said.

Whilst encouraging, the recovery is slow. Output in the first ten months of the year was 1.1% lower than the same period in 2018. Similarly, output in the 12 months to October was 1.3% down on the same period a year earlier, IBGE said. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)

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