April 2, 2019 / 1:25 PM / 3 months ago

UPDATE 1-Brazil industrial output up in February, but bigger picture less clear

(Adds details, context, comment)

By Jamie McGeever

BRASILIA, April 2 (Reuters) - Brazil’s industrial output rose in February, driven by solid gains in the production of consumer and capital goods, statistics agency IBGE said on Tuesday.

The 2.0 percent increase in industrial production compared with the same month last year snapped a three-month run of falling output on an annual basis, and reduced the year-to-date decline to 0.2 percent, IBGE said.

Compared with January, output rose 0.7 percent, mostly reversing the 0.7 percent fall in the first month of the year. Among the sectors that showed the biggest increases were autos and trucks up 6.7 percent), food products up 3.2 percent, and oil and biofuels goods up 4.3 percent.

In terms of broader economic segments, capital goods production jumped 4.6 percent on the month and 7.0 percent on the year, and consumer durables output rose 3.7 percent on the month and 12.2 percent on the year, IBGE said.

But while these figures show signs of strength and recovery, Brazil’s industrial performance lately has been a mixed bag.

“Today’s data suggest that the bulk of the weakness in industry is behind us. But, by the same token, the recovery will be weak,” wrote William Jackson, chief emerging markets economist at Capital Economics, in a note.

There were two extra working days in February this year compared to last year, IBGE noted, and when measured on an accumulated basis over the previous 12 months, output was up just 0.5 percent over the same period a year earlier.

On that accumulated 12-month measure, output growth has been slowing steadily since July last year, and production in the first two months of 2019 is down 0.2 percent from the first two months of 2018, according to IBGE figures.

Last month, Brazil’s central bank reduced its forecast for industrial production growth this year to 1.8 percent from 2.9 percent. (Reporting by Jamie McGeever; Editing by Jeffrey Benkoe)

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