The latest GDP data, released earlier this month, indicated a warming of domestic demand in Q1'24, with a reaction of investment, robust consumption and a better distribution of dynamism across the sectors that produce goods and services. In Apr'24, there were signs of continuation of this improvement, according to IBGE's monthly surveys on the industry, retail trade and services. 

Compared to the performance of early 2023, GDP in Q1'24, which registered +2.5%, was accompanied by resilience in the services sector (+3.3% in Q1'23 and +3.0% in Q1'24 versus the same period of the previous year), but with a strong acceleration in retail (from +1.5% to +3.0%), which is an important outlet for the country's industrial production.

Total industry also fared better, advancing +2.8% in Q1'24 vis-à-vis +1.5% in Q1'23, with a large difference in manufacturing GDP which, after being in the red throughout 2023 (-1.4% in Q1'23), grew +1.5% in Q1'24.

Thus, if the country's total GDP fell from +4.2% in the first three months of 2023 to +2.5% in the same period of 2024, this was largely due, on the supply side, to the decline in agriculture (-3.0%), whose basis of comparison is quite high given last year's super harvest of grains.

The month of Apr'24, in turn, was also marked by an increase in the manufacturing industry, even though the accommodation of the extractive sector reduced the industry's overall dynamism, and by an expansion of retail trade and services. It should be remembered that these monthly GDP surveys do not relate to value added, as in GDP data, but to the volume of production and sales.

Physical manufacturing output varied +0.3% between Mar'24 and Apr'24, seasonally adjusted, mitigating the negative impact of the extractive sector (-3.4%) on the result of the general industry (-0.5%). Thus, 72% of the industrial branches increased production. Among the macro-sectors, the leaders were capital goods (+3.5%) and durable consumer goods (+5.6%), indicating the role of interest rates reduction to stimulate the industry, since its markets require financing to grow.

Retail sales, on the other hand, increased +0.9% and reached their highest historical level in the seasonally adjusted series. And in its broad concept, which includes vehicles, auto parts, construction material and wholesale-retail, the variation was -1.0%, without surpassing the peak of the historical series reached in Aug'12. Still, 80% of its segments avoided negative ground.

As for services, real revenue registered +0.5% in Apr'24, after correcting for seasonal effects, with three of its five branches identified by the IBGE advancing and two contracting. In any case, the positive sign predominated in the first months of 2024, even more than last year, although the increases were more modest.

Compared to Apr'23, the advances are clearer. All three major sectors of the domestic economy registered expansion: +8.4% in the industry, +4.9% in broad retail and +5.6% in services. As a result, the Central Bank's IBC-Br indicator, which acts as a GDP proxy, registered +4.0% in Apr'24 versus Apr'23, the strongest increase since the end of the first quarter of 2023 in the annual comparison.

It is worth noting, however, the existence of a significant working-days effect, since Apr'24 had four more working days than Apr'23. This effect is diluted in the aggregate data for the first four months of the year, but the trend of a more balanced dynamism continues. 

In Jan–Apr'23, the contrast between sectoral performances was strong: services grew +4.8% and broad retail sales, +2.0%, while industrial production declined -1.0%. Now in Jan–Apr'24, everyone was in the black. 

Services seem to be accommodating, registering +2.3%, retail took the lead with +4.7% and the industry increased production again, with an rise of +3.5%. The high in the IBC-Br of Jan–Apr'24 (+2.1%) is about half that of Jan–Apr'23 (+4.1%), but represents a better distributed growth.

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