Brazilian industry finished its worst year in more than a decade on a bad note, with output declining more than expected as the country’s economic recession deepened.
Industrial production fell 0.7% in December from November in seasonally adjusted terms, the Brazilian Institute of Geography and Statistics, or IBGE, said Tuesday. A survey of economists by the local Agencia Estado newswire had produced a median estimate of a 0.1% decline, MarketWatch reported.
For all of 2015, output from Brazil’s factories, mines and oil fields tumbled 8.3%. That was the worst result since the IBGE’s current statistical series started in 2003. It also came on top of a 3% decline in industrial production in 2014.
In a bad omen for Brazil’s economic prospects in the quarters ahead, production of capital goods—equipment and machinery, a bellwether for investment—plunged 8.2% in December from November. Output in this crucial segment finished the year down a whopping 25.5% from 2014.
That likely reflects the dire mood of Brazilian business owners, who have dug in for what many expect to be a particularly grueling downturn in the economy.
The December plunge in capital goods overshadowed the fact that output of the sector’s other two components—consumer and intermediate goods—rebounded in the month. That, combined with an upside surprise in manufacturing data Monday, indicates industry may have bottomed out, according to Edward Glossop, an emerging markets economist with London-based Capital Economics, Bloomberg reported.
Investor confidence as measured by the National Industry Confederation, which hit an all-time low in October, rose last month to its highest since August. Industrial capacity utilization also increased in December from an historic low.
