Industrial production in Brazil and surprise rises 0.6% in October

Brazilian industrial production surprised in October when growing 0.6 percent over the previous month, much better than expected and keeping the third month followed in positive territory, but still shows a moderate recovery in the sector.
In comparison with October 2012, production advanced 0.9 percent, said the Brazilian Institute of geography and statistics (IBGE) on Wednesday, according to positive result.
"It's still a growth moderated by several factors such as higher interest rates, expectations of businessman recovering very slowly, household consumption less by default, credit more expensive," explained the IBGE Economist André Macedo. "Improved in recent months but still was not enough. The negative balance must still be removed. "
The results were higher than expected in research from Reuters and, in the case of monthly comparison, surpassed even the most optimistic projection. The median of estimates pointed high of 0.05 percent, with accounts ranging from 0.50 percent contraction the high of 0.50 percent. Compared with the same month last year the projection was 0.4 percent advance.
In October, one of the highlights was the Capital goods category, a measure of investment, which advanced for the third month followed by climbing 0.6 percent over September. Intermediate goods, in turn, surged from 0.3 percent.
Already the category of consumer goods, according to the IBGE, also showed 0.3 percent monthly advance, with a high of 1 percent on nondurable and semi-durable goods compensating the fall of 0.6 per cent of durable products.
By branches of activity, 21 of the 27 respondents presented monthly growth, with emphasis on publishing, printing and reproduction of recordings (13.1 percent), machinery and equipment (2.7 percent), petroleum refining and alcohol production (2.2 percent) and extractive industries (2.0 percent).
Insufficient
Although the result of October has marked the third monthly high then the movement was not strong enough to reverse completely the monthly decline of 2.5 percent in July, highlighting the difficulties of the sector and of the economy as a whole in print a more robust recovery.
According to the IBGE, from May to July the accumulated loss is 2.3 percent, while the three latest positive rates represent a cumulative gain of 1.3 percent.
"The expectation of a very moderate recovery in industrial production, with the prospect of a fourth quarter a little better than the third," assessed the Rosenberg Consultores Associados in note.
The gross domestic product (GDP) shrank 0.5 percent in the third quarter of this year, the first negative result and the worst in more than four years.
The signals for November are not entertainers. The Index of Purchasing Managers Survey (PMI, the acronym in English) conducted by Markit indicates that the activity of the industry's collapse last month, with decline in the volume of new orders and reduced workforce.
The IBGE also revised the September industrial production data before August to high of 0.5 percent, compared with 0.7 percent. Already the growth of production in September compared with the same month of 2012 was revised to 1.8 percent, compared with 2 percent.