May 5, 2020 / 1:20 PM / a month ago

UPDATE 1-Brazil industrial output back to 2003 levels after 9.1% slump in March

(Adds details)

By Jamie McGeever

BRASILIA, May 5 (Reuters) - Industrial production in Brazil plunged 9.1% in March due to the coronavirus outbreak, figures showed on Tuesday, a steeper-than-expected decline that takes the level of output back to where it was nearly 17 years ago.

That marked the worst month of March in almost two decades, and means the level of output is back to where it was in August 2003, government statistics agency IBGE said, adding the sector is now 24% smaller than its peak in May 2011.

Following bleak survey data for April, Brazilian industry looks set for an extremely tough period of evaporating demand and output, mounting job losses, and factory closures.

According to IBGE, the 9.1% decline in output was the largest since May 2018 when the economy was hit by a nationwide truckers’ strike, and the worst March since 2002.

The median estimate in a Reuters poll of economists was for a decline of 4.7%.

“All four major economic categories and 23 of the 26 sectors surveyed (reflected) the widespread closure of several industrial plants due to social distancing measures to combat the COVID-19 pandemic,” IBGE said, referring to the disease caused by the new coronavirus.

Durable goods production fell 23.5%, capital goods output fell 15.2% and consumer goods production was down 14.5% on the month, IBGE said.

Among specific sectors, auto and related production fell 28%, clothing and accessories fell 37.8% and leather, travel goods and footwear output was down 31.5%.

On a year-on-year basis, production in March fell 3.8%, while over the first quarter of the year it was down 1.7%, IBGE said.

The Fundacao Getulio Vargas’s national industrial confidence index for April slumped to 58.0 from 97.5 the month before, according to preliminary findings, marking the biggest month-on-month decline since the data series began in 2009.

Meanwhile, the IHS Markit manufacturing purchasing managers index (PMI) fell to 36.0 in April from 48.4 in March, its lowest reading since it was launched in early 2006. (Reporting by Jamie McGeever; Editing by Bernadette Baum)

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