Brazil's industrial output drops unexpectedly in November
RIO DE JANEIRO (Reuters) - Brazilian industrial output took an unexpected step backward in November as production of durable goods declined sharply, further damping hopes of a recovery in the long-beleaguered sector.
Output at factories and mines BRIO=ECI fell 0.7 percent in November from October, statistics agency IBGE said on Thursday, defying forecasts for a 0.5 percent gain in a Reuters survey of 20 analysts.
Production fell in 11 of 24 industrial segments, with food products down 3.4 percent and electric equipment sinking 2.8 percent.
Durable goods retreated 2.1 percent from October and 11 percent from November 2013.
The annual decline was mostly due to a sharp fall in automobile and home appliance production. Both sectors had benefited from government tax breaks in recent years, although heavier household debt loads, dwindling consumer confidence and higher interest rates have sapped demand for big-ticket items.
Brazilian industry contracted 3.2 percent in the first 11 months of 2014, IBGE said.
Most economists say the steady decline of Brazilian industry over the past three years is not about to reverse course in the short-term, as the government winds down stimulus programs and businesses work to sell off inventories in a weak domestic economy.
Hard-to-fix structural problems, such as tougher competition from abroad, poor infrastructure at home, and high tax and labor costs, are widely cited as the principal obstacles to local manufacturers.
November industrial production was down 5.8 percent from a year earlier BRIOY=ECI, worse than the 4.0 percent decline forecast in the Reuters poll. Continued...