National industrial production drops 0.5% in April, points out IBGE

In April 2024, national industrial production showed a drop of 0.5% compared to March, in the seasonally adjusted series. This result marks the end of two consecutive months of growth, a period in which it accumulated expansion of 1.0%. The data was released by the Brazilian Institute of Geography and Statistics (IBGE).

Economist Lauro Chaves Neto, advisor to the Federal Economic Council (Cofecon), explains that the upward trend in industrial production was slightly interrupted by seasonal factors.

“In the foreign market, we have a series of geopolitical conflicts, such as the war in Israel, the war in Ukraine, and this has affected global demands for industrial products. Not to mention that our tax system greatly harms the competitiveness of our industry”, he points out.

He states that it is “important” to view industry as the engine of the economy, as it has a multiplier effect and radiates its benefits to all sectors. On the other hand, he also points out that the growth of commerce and services increases the demand for industry in the market.

Economist and federal advisor to Cofecon Ana Cláudia Arruda explains that the drop was driven by extractive industries, especially the production of iron ore and oil, and fell 3.4%. Another negative contribution came from food products (-0.6%).

Despite this, Arruda highlights that in the year to date there has been a recovery in industrial activity.

“It is a sector that is reacting positively. In the first four months of 2024, industrial activity has already accumulated an increase of 3.5%. In 12 months, activity grew 1.5%. Even with the drop, it is possible to observe interesting movements in other strategic sectors for the economy, such as the automobile industry”, he highlights.

IBGE data shows that the quarterly moving average registered an increase of 0.2% in the quarter ending in April 2024 compared to the previous month.

Expectations

For André Galhardo, economic consultant at Remessa Online, the industrial sector should show improvement throughout the year and end 2024 in the “blue”.

He points out that at times industrial production was negative and suffered from the effects of the pandemic and high interest rates.

“Now, with the complete reestablishment of activities and the reduction in interest rates, although still far below what we would need, this should benefit the industry in the long term. So we wait for a recovery,” he says.

According to IBGE, it is worth remembering that with the results of April 2024, industrial production is 0.1% below the pre-pandemic level (February 2020) and 16.8% below the record level reached in May 2020. 2011.

By Brasil 61