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.
Analysts expect industrial output to show a drop of 2.49 percent in 2014 and to grow just 1.04 percent in 2015, according to the median forecasts of a weekly central bank poll released Monday.
Still, a survey of purchasing managers hinted at a slight pickup in manufacturing activity in December BRPMIM=ECI. The HSBC Purchasing Managers’ Index rose to a seasonally adjusted 50.2 from 48.7 in November.
Capital goods production, which often tracks business confidence in future economic growth, fell 0.2 percent in November from October, while consumer goods output sank 0.9 percent.
For details on the IBGE industrial output figures in Portuguese, click bit.ly/1xIswrK
(Percent change) Nov/Oct Nov’14/Nov’13
Capital goods -0.2 -9.7
Intermediate goods 0.0 -5.8
Consumer goods -0.9 -5.0
Durable consumer goods -2.1 -11.0
Semi-durable and non-durable -1.3 -3.1
Industrial output -0.7 -5.8
Reporting by Pedro Fonseca and Walter Brandimarte; Writing by Asher Levine; Editing by Alison Williams and Lisa Von Ahn