Holidays, suspensions and the disaster in Brazil deepen the fall

Holidays, suspensions and the disaster in Brazil deepen the fall
Holidays, suspensions and the disaster in Brazil deepen the fall

Although the UIA warns that in April there could be a slight recovery against March, it warns that the behavior will continue to be negative in the year-on-year comparison. When presenting the report, industrialists expressed their concern due to the rise in costs, the fall in consumption and the slowdown in construction.

Along the same lines, the Industrial Production Index (IPI) of the FAITHFUL Foundation recorded a drop of 10.9% in May compared to the same month of the previous year. In the first five months of the year, the index accumulates a decrease of 11.2%. The only positive note is an increase of 1% compared to April.

In this context, and given the crisis in demandlarge companies are putting a stop to their activity so as not to lose with stock and are appealing to the already known staff suspensions in order not to accumulate more stock.

For the current month, the outlook is also negative due to holidays and announcements of suspensions in activity in the automotive sector and in steel factories.

Sector by sector: the biggest falls

The largest decline occurred in automobile production, affected by the environmental disaster in Rio Grande do Sul, which caused problems in the supply of auto parts, generating sporadic stoppages in automotive plants. This negatively affected the production of the sector as a whole.

Vehicle exports, sales to dealers and registrations showed a year-on-year drop, although there was a slight monthly increase.

Ford automotive industry auto parts

According to FIEL, the second largest drop was observed in the production of non-metallic mineralssuch as cement, which for the second consecutive month reduced its year-on-year decline, accompanied by a new monthly improvement driven by the increase in sales of construction supplies.

In basic metal industries, aluminum production showed a year-on-year increase for the second month, after the slight decline between the end of 2023 and January of this year. In the case of the steel industry, performance was weak due to the weakness of related sectors and a pause in activity was anticipated from mid-June to mid-July in plants of one of the main companies in the sector.

According to the FIEL index, metalworking has accumulated 16 months of decline, although since last November it has reduced the pace of contraction. The worst performance was recorded by the white line, while the production of agricultural machinery showed a slower rate of decline along with a new monthly recovery in the patenting of agricultural machinery, following the typical seasonal behavior associated with the advance of the coarse harvest.

Among the sectors that registered a less profound decline than the average in May is food and beverages, whose fall is driven by a significant contraction in beer production, although soybean oil production has continued to contribute positively as in previous months.

Beef slaughter has accumulated a six-month decline and the deterioration in the dairy industry has been evident in recent months. In addition, May was a much colder month than expected, causing gas supply cuts and affecting the industry.

Source: Ambito

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