A Industry in Pernambuco recorded the biggest decline in production in all of Brazil, between the months of August and September last, according to the Brazilian Institute of Geography and Statistics (IBGE). The decline was 12%. Bahia’s manufacturing sector also had a negative performance in the monthly comparison (-3%). Among the largest economies in the Northeast, only Ceará recorded growth from one month to the next (2.2%).
In the most recent edition of Regional Monthly Industrial Production (PIM Regional), researched by the institute, Pernambuco appears ahead, in negative terms, among the 15 locations analyzed. Among the regions with the worst performance, it is followed by Amazonas (-6.1%), Rio Grande do Sul (-5.4%) and the Northeast Region (-5.2%). The state showed a slowdown in six of the 12 activities included in the study.
Pernambuco industry expands slowdown
The planning and management manager at IBGE in Pernambuco, Fernanda Estelita, assesses that “the result reaffirms the slowdown trend in Pernambuco’s industry“. “The drop observed in September is the most significant since April 2020, at the beginning of the coronavirus pandemic. Some cyclical factors may justify this behavior, such as credit difficulties and interest rates for producers, which, although they have started to fall, still remain at high levels”, he explains.
Between September of this year and the same month of 2022, the production volume of the Pernambuco industry also fell. There was a decline of 4.6%, contrary to the national average (growth of 0.6%). In the accumulated period from January to September this year, compared to the same period in 2022, the result of industries in Pernambuco was practically stable, compared to a slight drop of 0.2% in the national average.
The coordinator of the Economics Center of the state federation for the manufacturing sector (Fiepe), Cézar Andrade, highlights that The sector’s results in this second half of the year have been surprising the entity due to the atypical trend from the seasonality point of view.
“Traditionally, in the state, the second semester is better for the industrial sector than the first. This is the period in which the sugar-energy chain harvest begins and there is also an increase in the food segment. Furthermore, the production of stocks for end-of-year sales should already be taking place, which is not being confirmed in 2023,” he highlights.
The expert states that, among the factors that could justify this outlier, is the difficulty in accessing credit in the segment. “Our most recent quarterly industrial survey shows that The biggest challenges faced by industrial entrepreneurs in the state are obtaining financing and the high interest rate. The recent cuts determined by the Central Bank in the Selic have not yet had a significant impact on the market”, he assesses.
Industry in Bahia confirms negative trend
In the Bahian industry, September’s result over August is part of a sequence of negative rates. In August, there was a decrease of 3.1% compared to July. In the September PIM, the state showed a drop in all indicators. In the comparison between September 2023 and the same month in 2022, the decline reached 9%.
At the accumulated over nine months of this year, the drop is 4.5%. In the analysis of In the last 12 months, IBGE points to a decline of 5.9% in the state. The retraction in local manufacturing activity is related to the drop in demand for oil, chemicals and petrochemicals and metallurgical products in foreign trade. Bahian exports plummeted 26% from January to August this year, compared to the same period last year, negatively influencing industrial production.
Bahia also sufferscontinued impact of the closure of the Ford automotive complexin Camaçari, deactivated in January 2021. The closure of the automobile hub’s activities caused a blow to the local industry – and to the state’s economy as a whole – which should only begin to be reversed with the entry into operation of the greentech BYD, in 2024. The Chinese automaker is setting up shop in the former park of its North American competitor.
In the view of the local industrial sector federation (Fieb), other factors have been harming the manufacturing area, especially the adverse macroeconomic situation in the countrywith repercussions in Bahia.
“The results of industrial production reveal a worrying slowdown in national and Bahian industry. The sector faces challenges related to competitiveness, a complex tax system, high interest rates and the consequent restriction on access to credit, factors that have worsened its performance. It is crucial to highlight the need for structural reforms, such as tax reforms”, highlights the institution, through a technical note.
Ceará reacts, but does not reverse the fall
In Ceará, despite the reaction recorded between August and September, the sector also continues to slow down. In September 2023 compared to the same month of the previous year, the drop reaches 11.9%. In the nine months of this year, the retraction is 7.6% and, in the 12 months, it is 8.5%.
Only 5 regions saw growth in the country
In September, the country’s industrial production, according to IBGE, varied 0.1%, in the seasonally adjusted series, with positive rates in only five of the 15 locations surveyed. The biggest increase was in Pará (16.1%), with Rio de Janeiro (3.1%), Ceará, Paraná (1.8%) and Goiás (1.2%) following. Compared to September 2022, the industry grew 0.6% and was followed by ten of the 18 locations surveyed. The biggest increases were in Rio Grande do Norte (40.2%), Pará (14.5%) and Espírito Santo (14.2%).
At the accumulated in the year, compared to the same period in 2022, there was a reduction of 0.2% in national production. O accumulated in the last 12 months showed zero change (0.0%) In September.
In editing
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