Letter IEDI n. 1196—No progress at the turn of the year
The industry started 2023 on the wrong foot. Once again, the sector registered a decline in output, although, in aggregate, the drop was not very intense: -0.3% from Dec'22 to Jan'23, after discounting the seasonal effects. Negative signs, however, were relatively widespread among its different branches and regional parks.
Of the 25 branches identified by the IBGE, there was a loss of production in 11 of them in Jan'23. That is, a fraction of 44% of the total. Regionally, 8 of the 15 regional parks were in the red, or 53% of the total.
Two further comments are needed. Sectorally, the number of branches that lost dynamism—that is, those presenting a weaker result in Jan'23 than in Dec'22—was more significant, even though they remained in the black: 14 of the 25 branches or 56% of the total. In addition, important industrial parks in the center-south of the country had much more intense losses than the national average, such as São Paulo, Rio Grande do Sul and Rio de Janeiro.
Grouped into macro-sectors, much of the poor industrial result of Jan'23 came from capital goods: -4.8% versus Dec'22, with adjustment. Intermediate goods (-0.8%) and durable consumer goods (-1.3%) decreased more than the total industry and the macro-sector of semi-durable and non-durable consumer goods was virtually flat (+0.1%).
In all macro-sectors, Jan'23 brought deterioration compared to the end of last year, even in the case of semi-durable and non-durable goods. Thus, the vast majority of industrial branches (76% of them) were at lower levels of output than in the pre-pandemic period (Feb'20) and among these more than half (58%) registered double-digit gaps.
Among the regional industrial parks, this gap also occurred in a widespread way. In 10 locations, or 67% of the total, the level of production in Jan'23 fell short of the pre-pandemic mark, and in 6 of these (60%), the distance reached double digits.
That is, after the cyclical recovery from the shock of the pandemic, turbocharged by countercyclical measures such as the creation of Auxílio Brasil, the industry resumed a downward trajectory that in many cases led some branches and regional parks to a more difficult situation than the moment before the arrival of COVID-19 in Brazil.
Compared to the same month of the previous year, industrial performance at the beginning of 2023 did not decline, but was quite modest, at +0.3%. And this despite the help of a positive working-days effect, since Jan'23 had one more working day than Jan'22. This result was also not enough to offset the decrease of Dec'22 (-0.4%). There was no progress at the turn of the year.
The worst result from this perspective also came from capital goods (-6.6% against Jan'22), which has been in the red since Sep'22. Much of this was due to the production of capital goods for the industry itself, with a 13.8% decrease, and mixed-use capital goods, with -22.2%.
The production of intermediate goods, in turn, shrank 1.7% compared to Jan'22, with important influence from steel (-9.1%), inputs for civil construction (-2.9%) and petroleum products (-3.1%).
Consumer goods, on the other hand, grew, with the help of low bases of comparison. Durable consumer goods registered +13.9% in Jan'22, driven by automobiles (+14.7%) and other transport equipment (+48.4%). Semi-durable and non-durable consumer goods increased production by 4.6%, under the influence of ethanol and gasoline (+3.0%), dairy products (+3.8%), pork and poultry (+9.3%) and pharmaceuticals (+34.1%).