Industry down 1.3% in July, below pre-pandemic levels

Year to date, the sector is up 11%; month on month, 7%

Published in 02/09/2021 - 14:48 By Cristina Indio do Brasil - Rio de Janeiro

Industrial production shrank 1.3 percent in July and stood 2.1 percent below its value before the pandemic started, in February 2020.

Compared to 2020, an increase of 1.2 percent was reported. Year to date, the sector is up 11 percent, and seven percent month on month. The figures can be found in the Monthly Industrial Survey (PIM), published today (Sep. 2) by the government’s statistics agency IBGE.

In the view of Research Manager André Macedo, July’s performance is not essentially different from what has been observed over the course of the year. Of the first seven months of 2021, five saw a decline. Macedo added that the result is still linked to the effects of the COVID-19 pandemic.

In January 2021, he went on to say, industrial output reached 3.5 percent above pre-pandemic levels, but after this month, still in the beginning of the year, shutdowns and sanitary restrictions were imposed in certain locations which had an impact on production.

“With the advance of vaccination and more flexible restrictions, industrial production is now experiencing thee effects of the increase in costs and the disarrangement of the whole production chain,” he stated.

The study also showed that the domestic demand played a role on how the result turned out. The 10.2 percent shrinkage in beverages was among the most significant negative drivers in July’s industrial production. The month’s plunge in this sector broke a three-month streak with an accumulated 11.7 percent increase. The food sector faced a 1.8 percent decline, and helped pull the figure down. This was the second consecutive decrease, and accumulated losses stand at 3.8 percent.

“People are having difficulties in finding employment, especially with the amount of people out of the labor market, the precarious working conditions, and the reduction in the income mass, according to the Continuous PNAD, the National Household Sample Survey, published Tuesday,” the manager said.

Macedo further argued that inflation has lowered income among families as well as everyday consumption. “The performance in industry lies within the range of results for income, employment, and inflation displayed by the other surveys,” he added.

Translation: Fabrício Ferreira -  Edition: Denise Griesinger / Nira Foster

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