Brazil industrial output rises in October however near-term outlook stays cloudy By Reuters

SAO PAULO (Reuters) – Industrial manufacturing in Brazil rose 0.3% in October from September, authorities statistics company IBGE mentioned on Friday, returning to constructive territory after two consecutive month-to-month declines although nonetheless under pre-pandemic ranges.

The median estimate in a Reuters ballot of economists had projected stability from the earlier month.

Manufacturing in October additionally grew 1.7% from a yr earlier, barely above market consensus of a 1.6% rise.

Industrial output knowledge in Latin America’s largest financial system have been risky this yr – after an uptick early in 2022, when it posted 4 straight month-to-month positive factors, the sector has lately confronted a slowdown.

IBGE’s analysis supervisor Andre Macedo burdened in a report that within the final 5 months there have been three drops, with a bigger variety of industrial actions in destructive territory.

Brazil’s industrial manufacturing, he mentioned, “stays removed from paring the losses seen within the current previous,” as IBGE famous that it was nonetheless 2.1% under pre-pandemic ranges (February 2020) and 18.4% under its all-time excessive (Might 2011).

The higher-than-expected rise in October, mentioned Capital Economics’ chief rising markets economist William Jackson, “solely partly reversed the falls in output in the last few months.

“And surveys counsel that the sector fared a lot worse in November. This helps our view that development will come to a standstill within the coming quarters”.

In October, regardless of the general rise, solely seven of the 26 classes surveyed posted month-to-month positive factors, in keeping with IBGE.

Meals merchandise and steelmaking have been the highlights, whereas motorized vehicle, equipment & tools, and drinks had the best destructive affect.

“General, the commercial sector as an entire had an honest begin to This autumn following a stuttering efficiency in Q3, however the near-term outlook for the sector as an entire is deteriorating,” mentioned Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.