Letter IEDI n. 1167—Brazil and the world industry in the 1st half of 2022
The data recently released by UNIDO (United Nations Industrial Development Organization) on the evolution of manufacturing production in the world allow us to assess the relative performance of the Brazilian industry in the first half of 2022.
Over the period, the global industry slowed down, from a 3.7% increase in Q1'22 to 3.1% in Q2'22, with seasonal adjustment, in relation to the same quarter in 2021. In the comparison of Apr–Jun'22 to Jan–Mar'22, the variation was of only +0.2%, also with adjustment.
All groups of countries showed positive figures, with emphasis on middle-income industrialized countries, a set that includes Brazil. Africa, Asia and Oceania were the regions that showed the greatest slowdown.
In the Brazilian industry, as the IEDI Analyses have shown, there was no loss of pace, but the UNIDO data make it clear that, even so, we are far below the world industrial performance.
From Q1'22 to Q2'22, the year-on-year result of Brazilian manufacturing increased from -4.5% to +0.6%, considering the seasonally adjusted data as does UNIDO. Despite the improvement, the 0.6% rise is almost 1/5 of the sector's result in the world (+3.1%).
And our lag only worsens when compared to the industrial performance of countries more similar to Brazil. The middle-income industrialized nations, the group to which we belong, registered an expansion of +4.0% in their industrial production in Q2'22, that is, almost 7 times higher than the Brazilian figure.
For Latin American as a whole, the increase in Q2'22 reached 4.9%, which represents a pace of expansion almost 8 times more robust than that of our manufacturing industry.
We also stayed far away from high-income industrialized countries (+2.4% versus Q2'22) and China (+2.3%), which recorded a significant deceleration in relation to the result of Q1'22.
Regionally, it was in Europe that the industry grew least, mainly due to the armed conflict in Ukraine and its consequences on the cost of energy for companies, and the corrosion of consumer purchasing power due to the rise in inflation. Its industrial production grew +1.6% in Q2'22, that is, still almost 3 times more than the industrial production in Brazil.
The greatest advances were in Latin America, which, as we have seen, grew +4.9%, registering an important acceleration in relation to Q1'22 (+2.3%), and in North America, which, by expanding its industrial output by 4.5% in Q2'22, maintained its dynamism in relation to Jan–Mar'22 (+4.7%). Much of the Latin American improvement was because the Brazilian industry stopped contracting.
Based on data collected by UNIDO, the IEDI established a ranking with the industrial performance of 113 countries in 2022. The improvement of the Brazilian industry made its position rise from Q1'22 to Q2'22, but it still remained in the lower half of the international ranking of the sector. In Q2'22, we advanced to 81st position, behind countries such as China (70th with 2.3%), the USA (46th with 4.5%) and Mexico (41st with 5.2%).
Thus, in the first half of 2022, while in the world the industry registered +0.1%, in Brazil it fell 2.0%, compared to the same period of the previous year, with seasonal adjustment. In the ranking built by the IEDI, we were among the last: Brazil occupies the 100th position out of the 113 countries identified by UNIDO in comparison with the 1st half of 2021.
One last important piece of information to take into account. In the world, UNIDO shows that high and medium-high technology industries grow above the manufacturing industry's aggregate: +3.7% compared to +3.1% in Q2'22. In Brazil, as analyzed in Letter IEDI n. 1162, high and medium-high technology not only did worse than the total aggregate of the sector, but also continued to contract in Q2'22.