The latest quarterly report published by the United Nations Industrial Development Organization (UNIDO) shows that the world's industry presented signs of reheating at the end of 2023, due to higher growth in China and improvement in high-income countries. The branches of greater technology intensity continued to pull the sector.

In Q4'23, global manufacturing output registered a variation of 1.0% in relation to the previous quarter, after adjusting for seasonal effects. This is the first positive result after a phase of virtual stagnation that began at the end of 2022.

Compared to the same period of the previous year, in turn, the pace of expansion in Q4'23 doubled in relation to Q3'23: +1.5% versus +0.7%, respectively. As a result, the increase in the year was in the order of 1.1%, that is, about 1/3 of the 2022 result. 

The main change brought about by the end of last year was in the group of high-income industrialized economies. Their manufacturing production went from a 0.9% decrease in Q3'23 to a 0.8% increase in Q4'23, in relation to the previous period. Compared to the year before, the intensity of the drop was reduced by 2/3, from -2.5% in Q3'23 to -0.9% in Q4'23.

This was especially noticeable in Europe, whose industrial output went from a decline of 2.0% in Q3'23 to a rise of 1.2% in Q4'23. Such short-term progress has not yet been enough, however, to bring European industry to a production level higher than that seen at the end of 2022. In Q4'23 compared to Q4'22, there was a decrease of 1.2%, that is, only a little milder than in the previous quarter (-1.3%).

The end of 2023 was also marked by another factor: the continuation of the superior dynamism of Chinese industry, whose results in Q4'23 pointed to an additional, albeit modest, acceleration. In relation to the previous period, Chinese manufacturing grew 1.9% in Q4'23 and 1.7% in Q3'23. Compared to the same quarters in 2022, the increases were of 4.9% and 4.3%, respectively.

From a regional point of view, there are still some observations worth making. The first is that the North American industry continued in the red: -0.5% in relation to both Q3'23 and Q4'22, with seasonal adjustment. 

The second is that Latin America and the Caribbean also lost industrial production and were the only region in which there was no improvement in any of the comparisons. In relation to Q3'23, the region registered -0.4%, reaching 5 consecutive quarters of no growth, and compared to Q4'22 it registered -1.5%, the worst quarterly result of last year.

Unlike Argentina and Mexico, which contributed negatively to the performance of Latin American industry, Brazil stood out for mitigating the regional situation. Our manufacturing production did not show vigor in Q4'23, but at least it avoided the negative terrain: +0.4% against Q3'23 and +0.1% against Q4'22, always with seasonal adjustment.

It should be noted that, even with the improvement late in the year, the Brazilian industry continued to lag far behind the evolution of the sector in the world. This was a mark of 2023. In the year as a whole, we can say that we moved in the opposite direction to the global industry: -0.9% versus +1.1%, respectively, with seasonal adjustment.

Much of this asymmetry can be attributed to the sectoral profile of last year's dynamism. In the global industry, UNIDO's data showed the leadership of high and medium-high technology, whose production in Q4'23 advanced 3.9% compared to Q4'22, that is, more than double the figure for the sector as a whole. In Brazil, these branches registered a loss of 6.3%, according to IBGE data analyzed by the IEDI.

As a result, in the ranking of the evolution of industrial production built by the IEDI based on UNIDO data for 117 countries, the Brazilian position improved at the end of 2023, but it was still intermediate. That is, we are far from being in the 1/3 of countries with the best industrial performance.

In Q4'23, we were in 57th place, rising eight positions compared to Q3'23 (65th) and nine in relation to Q4'22 (66th). Brazil ranked better than some of its Latin American neighbors, such as Mexico (71st, with -0.8%), Argentina (100th, with -5.8%) and Colombia (101st, with -6.0%).

For 2023 as a whole, the result of -0.9% of Brazilian manufacturing placed us in 64th. Although we remained in the bottom half of the ranking, it should be noted that it was the best position obtained by Brazil since the pandemic. In 2021 we were in the 89th and in 2022 in the 96th place. 

In Latin America, we surpassed the industrial result of Argentina (70th), Colombia (97th) and Peru (104th), but were behind Ecuador (4th), Mexico (45th), Bolivia (42nd), Uruguay (51st) and Chile (52nd).

If we take the industrial performance of the BRICS countries as a parameter, Brazil was the worst performer in 2023. Russia was in 11th place in the ranking, with a growth of 7.1%, followed by India, in 17th place, with a high of 5.2%, and China, in 20th place, with 4.7%. South Africa appears closer to Brazil, in 50th place and with a result of 0.4%.

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