Letter IEDI n. 851–Industry in April 2018: a month of improvement
Industrial result in April contrasts with the almost stagnant picture of the previous months as there was the first noteworthy increase in 2018, signaling a slightly more substantial momentum in the second quarter of the year. The chances of this occurring, however, would be greater had May not suffered the adverse effects of the disruption in road transport of cargo. Hence, the overall performance of the quarter will probably be defined by June.
The 0.8% growth rate in relation to March, seasonal effects eliminated, resulted from positive variations in half of the 26 industrial sectors monitored by the IBGE, forming a quite divided picture, as has been frequent in this stage of the industrial recovery. In addition, from a regional point of view, the increases were widespread, reaching 10 of the 15 areas surveyed, such as Rio de Janeiro, Minas Gerais and the Northeast. São Paulo, on the other hand, grew almost nothing (+0.3%).
April was also a favorable month if taken in the interannual comparison, but in this case there was a working-day effect strengthening the result, since Apr/18 had three more working days than April/17. Output expansion reached +8.9% in this comparison, mitigating the slowdown that had occurred in the first quarter of the year. Thus, the performance of January-April 2018 (+4.5%) was in line with that of the last four months of 2017 (+4.3%).
The meaning of April vis-à-vis the sluggishness of the first quarter of the year can be verified from the seasonally adjusted variations of April versus March and the period January-March 2018 (Q1/18) compared to October-December 2017. Although they oscillate more, seasonally adjusted data allow us to better evaluate the industry's shorter-term developments as they do not carry the effects of very low comparison bases as happens with the year-on-year series.
Among the industrial macro-sectors, it was in intermediate goods that April more clearly signaled a major change in picture in relation to the beginning of 2018. While Q1/18 brought a 1.3% decline compared to the previous quarter, production increased by 1% from March to April, seasonal effects excluded.
For durable consumer goods, April's growth remained at more robust levels, largely due to the production of vehicles: +2.8% compared to March, the best result among the macro-sectors (in the series with adjustment). Despite this, there was a certain slowdown in relation to the result of the first quarter of the year (+3.7% against Q4/17).
Semi-durable and non-durable consumer goods, in turn, also recorded deceleration, but in a much more pronounced way. Production growth, which had reached 1.4% in Q1/18, declined to just 0.5% in April. Despite this, there has been an improvement in the sequence of results, mostly positive since Dec/17, something that did not occur last year.
Capital goods managed to maintain the level of dynamism in the passage from March to April. In Q1/18 the sector expanded 1.5% compared to the previous quarter and, in April, +1.4% compared to March, after eliminating the seasonal effects.