Brazil’s Industrial Production Decline in July

SAO PAULO (Reuters) – Brazil’s industrial production fell more than expected in July, losing steam after a stellar performance in the previous month, according to the government statistics agency IBGE on Wednesday.

Industrial production in Latin America’s largest economy decreased by 1.4% in July compared to June, while economists polled by Reuters had projected a decline of 0.9%.

“Negative industry performance in July comes after intense growth in the previous month,” stated IBGE survey manager Andre Macedo. In June, production had risen 4.3% from May, breaking a two-month streak of negative performance, as per revised data from IBGE.

Some important industrial plants halted production processes in July. The main contributor to the decline was food products, which saw a production drop of 3.8% on a monthly basis.

“There was a drop in sugar production due to the drought effects in the country’s center-south region, as well as declines in beef and soy products. These items contributed most negatively this month,” Macedo added.

Despite July’s decrease, industrial production jumped 6.1% compared to a year earlier, with IBGE noting “spread positive results” and a low comparison base from 2023. Economists had anticipated an annual increase of 6.3%.

Currently, Brazil’s industrial sector is 1.4% above pre-pandemic levels but remains 15.5% below its record high attained in 2011.