Industry production level in October is equivalent to that of 2009, says IBGE

With a slight increase of 0.3% in October compared to September, after two consecutive months of decline, industrial production reached a level equivalent to that registered in January 2009, when the industry was still hit by the recession caused by the international financial crisis of 2008, show data from the Monthly Industrial Survey – Physical Production (PIM-PF), released this Friday, 2nd, by the Brazilian Institute of Geography and Statistics (IBGE).

For André Macedo, manager of the Industry Coordination of the statistics agency, it is yet another sign of weakness in the sector’s performance.

In comparison with the level of activity verified before the Covid-19 pandemic hit the economy, in February 2020, industrial production for October is 2.1% below. In comparison with the highest level of activity ever recorded in the IBGE historical series, reached in May 2011, October production is 18.4% below.

According to Macedo, the weakness of domestic demand is making the difference in the negative performance of the industry in recent months.

Industrial production had a sequence of increases between February and May and increased in July. For the IBGE researcher, much of this growth was based on measures to support income, such as strengthening income transfers and advances on the 13th salary for retirees and pensioners.

More recently, even though some of these measures were repeated in the final stretch of the electoral campaign, they were supplanted by headwinds.

“More recent effects of rising interest rates, high default rates and food inflation” weighed against demand for industrial goods, Macedo said.