Letter IEDI n. 1103—The Manufacturing Industry by Technological Intensity: first half expansion and signs of cooling in June
Although the industry could have done better in the first half of 2021, as negative results prevailed month after month, when compared to last year's situation the sector presented expressive growth rates, due to very depressed bases of comparison. For the second half of the year, this statistical effect tends to weaken, as already suggested by data for Jul'21, the most recent IBGE survey.
Thus, in the 1st half of 2021, manufacturing output registered +14.5% compared to the 1st half of 2020, while in Apr–Jun'21 it increased +25% in relation to the same quarter of last year, a period that concentrated the highest negative impacts of the pandemic. In Jul'21, the growth rate was of only +1.7% against Jul'20.
In this Letter, the IEDI analyzes the industry’s performance in the first half of 2021 according to four technological intensity categories, following to the most recent version of the OECD classification, namely: high, medium-high, medium and medium-low intensity.
The high intensity industry registered an increase of +4.4% in the 1st half of 2021, largely due to Q2'21, when it rose +8.0%. Despite this, it was unable to offset the losses caused by the pandemic, which happened on top of those of 2019: -6.3% in the 1st half of 2021 and -9.5% in the same period of 2020. The main factor in this reaction was the electronics segment, with growth of +15.5% in the first half of the year and +31.5% in Q2'21.
The medium-low industry showed very similar dynamism to the high-tech range, expanding +4.5%. Here, however, previous losses were highly concentrated in Q2'20 (-9.5%), with growth resuming in the following quarter. In Apr–Jun'21 it registered +6.9%. Important at the beginning of the recovery, the food and beverages branch ceased to lead this process, giving way to textiles and clothing, metal products, and wood, paper and cellulose.
Among the technology intensity groups, the ones that have grown the most are those in an intermediate position: the medium-high and medium technology ranges, which in the first half of 2021 grew +32.2% and +23.9%, respectively.
The medium-high industry reached the mark of +70% in Apr–Jun'21 compared to the same period of the previous year, largely due to the production of vehicles (+212.8%), which was practically paralyzed by the initial impacts of the pandemic in 2020. The segments of capital goods, such as machinery and equipment (+68.7% versus Q2'20) and electrical appliances (+38.5%) have also been able to obtain expressive growth rates.
As for the industry of medium technology intensity, in the black since the end of 2020, it managed to increase production by +41.2% in Q2'21, with great help from metallurgy (+50.8%) and non-metallic minerals (+47.7%), stimulated by exports and by the resumption of civil construction. The rubber and plastic branch was another component to be on positive ground with a robust rate (+32.6%).