Letter IEDI n. 1137—Industry in 2021: Brazil behind the World
Data recently released by UNIDO (United Nations Industrial Development Organization) on the evolution of industrial output in the world allow us to evaluate in a comparative perspective the performance of Brazilian industry in 2021. Our recovery, as we already know, was partial because we lost momentum throughout the year.
A totally different reality was seen in global manufacturing, according to UNIDO. After its production decreased 4.2% in 2020, it registered a strong recovery in 2021: +9.4%, with seasonal adjustment. The increase was significant in all groups of countries and, although it showed a slowdown as the bases of comparison became more robust, in no quarter did it return to the red as happened in Brazil.
According to UNIDO, Brazilian manufacturing, seasonally adjusted, barely recovered the losses caused by the first impacts of the pandemic: -4.8% in 2020 and +4.9% in 2021. And it is worth remembering that in 2019 the sector had been flat (+0.1%).
So, while we fell as much as the global industry in 2020, our recovery was almost half the intensity of the rest of the world's. We also stayed far away from industrialized countries, whose industrial production advanced 7.3% in 2021, and even further from China (+12.3%) and from the other emerging countries excluding China, which registered 10%.
We are also left behind if we look only at Latin America, whose 2021 result was 9.3%. It is true that, according to last year's UNIDO report, the drop in the region's aggregate was more intense than that of Brazil in 2020, reaching -7.3%, but it must be recognized that at least the set of Latin American countries managed to compensate for the losses.
Among the emerging countries, the only group identified by UNIDO that approaches the pace of growth of Brazilian industrial production in 2021 was Africa, which registered +4.9%.
As a result, Brazil's manufacturing occupied, in 2021, the 82nd position in the ranking of 113 countries that the IEDI built from the UNIDO database. That is, we were in the bottom half of the ranking, among those that grew the least last year.
The divergence was even greater in Q4'21. World manufacturing grew 3.3%, that is, less than in the previous quarters, since in many countries the level of pre-pandemic production had already been exceeded, while in Brazil the sector fell 6.6% in relation to the same period of the previous year, with seasonal adjustment.
In this way, we dropped even further in the ranking of countries. We appeared in 107th place among the 113 countries identified by UNIDO in the comparison of Q4'21 with Q4'20. Worse than us there were only a few countries, including Mozambique, Ireland and Uganda.
The Brazilian performance was an important factor for, according to UNIDO, Latin America to present the weakest result among the regions surveyed in the final quarter of last year: +1.6% against Q4'20. Positive contributions came from the industries of Mexico (+2.0%), Argentina (+7.9), Uruguay (+11.9) and Colombia (+12.6%).
The developed countries of North America (+4.2% versus Q4'20) and Asia and the Pacific (+4.1%), as well as the emerging and developing countries of the latter region except China (+6.3%) grew above the global figure at the end of 2021. The Chinese industry (+3.1%), in turn, grew in line with the world total.
UNIDO data also show that the medium-high and high-tech industries (+4.7% compared to Q4'20) led the growth of global manufacturing in the last quarter of 2021.
This part of the industry recovered more quickly from the initial effects of the pandemic, with high growth rates since Q4'20, due to the performance of the sectors producing computers, electronic and optical products, electrical equipment and pharmaceutical products. Many of its branches have already reached pre-pandemic levels.
In the medium-high category, motor vehicle production continued to be an exception, hampered by the persistent bottlenecks in its supply chain. This has been an obstacle to more robust industrial recoveries in economies with a large automotive sector, such as Germany and South Korea.
In Brazil, according to Letter IEDI n. 1131 “Industrial reaction in 2021: only in intermediate technological groups,” despite data not directly comparable to those of UNIDO, there was no recovery in our high-tech industry, which registered a loss of 2.9% in 2021, worsened in the fourth quarter: -11.9% in relation to Q4'20. This group has been in the red for three years in a row.