Industry increased 0.3% in January, points out IBGE

“Industrial activity, as it advances, reverses the fall marked in December 2022, when it interrupted two consecutive months of production growth”, pointed out André Macedo, manager of the Monthly Industrial Survey (PIM) Brazil.

Among the 25 activities, 14 showed growth. Mining and quarrying industries, with an increase of 1.8%, exerted the main impact, which interrupted the two months of decline.

The survey showed that the main activities that contributed positively were food products (4.6%), pharmochemicals and pharmaceuticals (34.1%), extractive industries (2.0%) and other transport equipment (27.0% ).

The negative impacts came from non-metallic mineral products (-10.6%), wood products (-21.5%) and products derived from petroleum and biofuels (-2.1%).

Producer Price Index (PPI) falls in February

Producer prices in Brazil fell by 0.30% in February compared to January, according to the IBGE.

The Producer Price Index measures product prices “at the factory gate”, excluding taxes and freight. The IBGE measures 24 industry sectors and covers major economic categories, such as capital goods, intermediate goods and consumer goods (durable, semi-durable and non-durable).

According to César Bergo, an economist, the index is important because it impacts the entire price chain in the economy. “This is positive because it demonstrates that the producer price is falling, this will end up affecting inflation, which will continue to show this decrease”, he explains.

For IBGE’s Analysis and Methodology manager, Alexandre Brandão, what explains the variation in February are the prices that varied the most. Industries linked to consumption showed greater positive variations, increasing values. The highlights were: apparel (4.91%), extractive industries (3.00%) and beverages (1.79%).

“Industries with the greatest weight, in the calculation of the IPP, had prices falling, as is the case of other chemical products (-0.30 percentage points), food (-0.18 pp) and extractive industries (0.14 pp )”, points out Brandão.

Marcos Sarmento Melo, finance specialist and director of Valorum Empresarial, warns of the downside of falling prices. “The industry has been suffering a lot in recent years in Brazil, reducing its production. There was a lack of equipment, raw materials and inputs for the industry to produce”, he points out.

For him, the pandemic, the closure of companies and the disorganization of the production chain around the world were factors that affected the work of the Brazilian industry. “This shows that, in fact, there is still a very long way for the industry to recover”, he says.