The latest IBGE data revealed that Brazilian industry has not grown for five consecutive months. While specific factors may also play a role, it is evident that this adverse phase coincides with a period of rising interest rates and increasing domestic uncertainties, such as those related to public finances, as well as external uncertainties increasingly tied to profound changes in the governance of international trade.

From January to February 2025, industrial output varied by -0.1%, after seasonal adjustment. Since September 2024, there has been a cumulative loss of 1.2%. Moreover, while February 2025’s result was very close to January’s (0%, with adjustment), the negative trend spread across different industrial branches.

In the first month of the year, the decline was more localized, affecting 32% of the sectors tracked by the IBGE. This share became the majority in February 2025, reaching 56%. As a result, the manufacturing industry, which had been positive in January (+0.6%), also turned negative (-0.5%).

Among the four macro-sectors, half failed to increase production from January to February 2025: durable consumer goods, with a 3.2% drop, gave back most of the growth recorded in January (+3.8%); semi-durable and non-durable consumer goods, in turn, returned to negative territory (-0.8%), making January’s gain (+3.2%) an exception in the downward trajectory that began in October 2024.

Regionally, 7 of the 15 industrial hubs surveyed by the IBGE showed negative rates in February 2025, after seasonal adjustment, with the Southeast region standing out. São Paulo’s industry, the largest and most diversified in the country, recorded the third-worst result (-0.8%), while Rio de Janeiro (-0.3%) and Minas Gerais (-0.2%) also posted declines. The most significant drops, however, were recorded in the Northeast: -2.6% in Bahia and -1.0% in Ceará.

When comparing the industry’s performance to a year ago, growth was still observed, but at a much slower pace, reflecting the recent month-on-month slowdown in the seasonally adjusted series mentioned above.

After a slight deceleration from 3.9% in Q3 2024 to 3.1% in Q4 2024, the performance in the Jan–Feb 2025 period (+1.4%) indicates a halving of this pace of growth.

Much of this was due to the macro-sectors of intermediate goods and semi-durable and non-durable consumer goods, which were nearly stagnant in the first two months of the year. In the former, after expanding 2.8% in Q4 2024, growth slowed to 0.1% in Jan–Feb 2025. In the latter, it recorded 0% in the last two months, avoiding the negative result of Q4 2024 (-0.2%) but maintaining a stable outlook.

Capital goods production also lost some momentum but remained at a solid pace. It recorded 8.0% in Jan–Feb 2025 compared to 14.1% in Q4 2024, always relative to the same period in the previous year. In the case of capital goods for the industry itself, it is worth noting that the recovery that began in Q2 2024 continued into early 2025, with a rise of 11.3% in Jan–Feb 2025.

Finally, production of durable consumer goods continued to grow at double-digit rates: 16.8% in Jan–Feb 2025 versus 17.2% in Q4 2024, driven by an acceleration in automobiles (+16.3%) and other transport equipment (+20%). The household appliances segment (+16.5%) performed close to the macro-sector average but lost some momentum.

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