Brazil Industrial Production Grew 0.4% in January as Output of Capital Goods Increased

By Jeffrey T. Lewis

SÃO PAULO--Brazil's industrial production grew for the ninth consecutive month in January as output of capital equipment and consumer goods increased.

Production rose a seasonally adjusted 0.4% in January, and increased 2% from the same month a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Friday. In December, production rose a revised 0.8% in the month and grew 8.2% from a year earlier.

Even as Brazil's industrial output continued its recovery after plummeting almost 20% in April, the month when social-distancing measures were at their strictest, the pace of the expansion has slowed and fewer sectors are showing growth than in previous months, according to the IBGE.

Stimulus spending by the Brazilian government, especially aid payments to the country's poorest residents, helped boost retail sales and industrial production after the program began in April. The administration of President Jair Bolsonaro cut the aid payments in half starting in September and the program ended in December, reducing the amount of money many Brazilians have to spend and slowing the momentum of the economy.

Production of capital goods, which is equipment businesses use to produce more goods, increased 4.5% in January from December and rose 17% from a year earlier, while output of consumer goods grew 1% in the month and fell 1.2% from a year earlier, the IBGE said.

Of the 26 categories surveyed by the statistics agency, 14 showed a decline in production, with metallurgy dropping 13.9% in the month and output of computer equipment and electronics down 10.6%, the IBGE said.

Write to Jeffrey T. Lewis at [e-mail]

(END) Dow Jones Newswires

03-05-21 0740ET