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UPDATE 2-Brazil's industrial output up on annual basis for 1st time in nearly 3 years
March 8, 2017 / 1:51 PM / 8 months ago

UPDATE 2-Brazil's industrial output up on annual basis for 1st time in nearly 3 years

 (Adds comments)
    By Silvio Cascione
    BRASILIA, March 8 (Reuters) - Industrial output in Brazil
rose on an annual basis in January for the first month in nearly
three years, in a sign that a severe recession could be ending
soon.
    Production increased 1.4 percent from a year earlier,
government statistics agency IBGE said on Wednesday. 
    That topped expectations for a 1.1 percent gain in a Reuters
poll of economists. 
    Industrial output had been falling on an annual basis for 34
consecutive months as Brazil's economy went through its worst
recession on record. Data on Tuesday showed the nation's gross
domestic product shrank 3.6 percent in 2016, failing to improve
in the fourth quarter as economists had forecast.
    The stronger-than-expected industrial performance in January
strengthens the argument of many economists who see Brazil
emerging from recession this quarter. Finance Minister Henrique
Meirelles on Tuesday said the nation was "clearly" growing
again.
    "The data that we already have for February suggest another
increase in industrial output," economists with São Paulo-based
Banco Bradesco SA wrote in a research note. 
    Economists expect industrial output to grow 1.1 percent in
2017 from 2016, according to a weekly central bank survey.
    Industrial output fell 0.1 percent in January from December,
following an increase of 2.9 percent in the last two months of
2016, IBGE said. Economists in a Reuters poll expected a decline
of 0.35 percent. 
    The month-on-month drop resulted mostly from a 10.7 percent
decline in automobile production, IBGE said. However, the
national automakers' association said on Tuesday that production
recovered strongly in February, growing by nearly 15 percent.
    A private survey of purchasing managers last week showed the
the manufacturing decline hit its slowest pace in 13 months in
February, with confidence rising for the second straight month. 
    "It doesn't mean that the recovery will be solid from now
on, but it looks like the industry is bottoming out," IBGE
economist André Macedo told journalists. "The good news is that
the downturn is not deepening anymore."
    Output increased in 12 of the 24 sectors that IBGE covers on
a monthly basis.    
    
 (Percent change)                               m-m  y-y
 Capital goods                                 -4.1  3.3
 Intermediate goods                             0.7  0.8
 Consumer goods                                 0.3  2.3
     Durable consumer goods                    -7.3  3.2
     Semi-durable and non-durable consumer      3.1  2.1
 goods                                               
 Industrial output                             -0.1  1.4
 
 (Aditional reporting by Rodrigo Viga Gaier in Rio de Janeiro;
Editing by Daniel Flynn and Lisa Von Ahn)
  

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