The industrial growth of Sep'24, which reached 1.1% in the seasonally adjusted series, helped in obtaining another positive quarter; besides, there were gains in speed not only for the sector as a whole, but also for most of its branches and regional parks.

In Q3'24, the increase reached 3.9% compared to the same period of the previous year. This was the best quarterly result since Apr–Jun'21 (+22.7%), when very depressed bases of comparison, due to the shock of the 2020 COVID-19 pandemic, produced significant advances.

In addition to the gain in robustness, the distribution of growth has also improved. In Q1'24, 64% of the industrial branches recorded an increase in output in relation to the same period last year, a share that rose to 76% in Q2'24 and then to 80% in Q3'24.

In addition, 16 of the 25 branches monitored by the IBGE did better in Jul–Sep'24 than in Apr–Jun'24, notably metallurgy, which stopped falling, but also metal, rubber and plastic products, chemicals, and vehicles, among others.

Regionally, the pace of growth in Q3'24 improved in 56% of the industrial parks and a (minority) share of 22% of the total locations monitored by the IBGE registered a negative rate in the quarter in question.

It is also worth noting that all industrial macro-sectors grew in Q3'24, a quite different picture from that of Q3'23, when only one of them advanced, two contracted and one presented stagnation.

The macro-sectors producers of durable goods, whether for investment or consumption, are the positive highlights in both Q3'24 and in the year to September'24. This is the part of the industry with markets boosted by the fall in interest rates between Aug'23 and May'24.

For this reason, these macro-sectors tend to be the most affected by the new phase of Selic increase by the Central Bank, which went from 10.50% p.a. to 10.75% p.a. in Sep'24 and then to 11.25% p.a. in Nov'24. Market analysts indicate that this bullish cycle may exceed 13% p.a. next year. Given this perspective, confidence indicators of industry entrepreneurs showed a decline in Oct'24, moving to the region of pessimism in some cases.

There may, however, be some mitigating factors for the initial negative effects of this monetary policy reversal. For capital goods, this is the case of the super-accelerated depreciation program, recently regulated by the government, and also the availability of BNDES credit lines at more competitive costs, such as those for innovation and digitization of companies. For consumer goods, the vigor of the labor market stands out, as shown by the PNAD/IBGE data, among other surveys.

The strongest expansion in Q3'24 was in durable consumer goods (+16.4% compared to Q3'23), whose production was driven by the substantial improvement in performance of the automotive industry (from -1.4% in Apr–Jun'24 to +13.2% in Jul–Sep'24) and the high growth rates recorded by household appliances (+24.1%).

Production of capital goods, which had been in the red between Q3'22 and Q1'24, grew at double-digit rates and in a very resilient way: 12% in Apr–Jun'24 and 11.9% in Jul–Sep'24. This performance was driven by mixed-use capital goods (+23%) and capital goods for transportation (+27%), but it is worth noting that those for the industry itself (+10%) had not grown so much since Q2'21 (+51.3%).

Intermediate goods, in turn, continued their upward trajectory, registering 3% in Q3'24, with the help of production of vehicle intermediates (+18.1%) and agricultural pesticides (+17.7%), as well as steel (+7.7%) and inputs for civil construction (+7.8%). Much of this mitigated the effect of the loss of pace of semi- and non-durable consumer goods (+2.7%), largely due to food production (-0.7%).

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