Amid a scenario of recovering confidence by economic agents, Brazil's national industrial output returned to growth in January. The increase, of 1.4% compared to the same period of last year, is the first after 34 consecutive months of decline. The data was released by the Brazilian Institute of Geography and Statistics (IBGE) this Wednesday (8 March).

After accumulating 2.9% growth in the last two months of last year, in January industrial production had a slight decrease of 0.1% compared to December. Between December and January, 12 of the 24 industrial sector surveyed had positive growth.

The highlight was the petroleum products and biofuels sector, with output up 4%, reversing the decline seen in the last two months of 2016. Pharmaceutical chemicals and pharmaceuticals also showed notable performance, growing by 21.6%. The result recovers the 19.4% loss seen by the sector between September and December.

Other sectors that did particularly well include food products (1.2% growth); beverages (5.5%); nonmetallic mineral products (2.6%); extractive industries (1.1%); metallurgy (1.8%), pulp and paper products (2.3%); and other transportation equipment (6.4%).

In January, the major economic categories showed a decline compared to the previous month, driven mostly by consumer durables and capital goods. However, the sectors producing semi-durable and non-durable consumer goods and intermediate goods saw positive results. The former saw growth of 7.4% in the last two months, while the latter was up 3.2% in the last three months.

Increased output

A total 16 subsectors increased production in January compared to the same period last year. The main growth was observed in extractive industries (12.5%), influenced by positive results in the extraction of iron ore, crude oil and natural gas. The price of these raw materials saw a sharp rise this year, positively influencing indexes such as the trade balance.

Also worth mentioning are the positive results in the electronic and optical products (18%), textiles (10.8%), apparel and accessories manufacturing (13.3%) and metallurgy (4.2%) sectors. Chemical products (2.2%) and leather goods, travel items and footwear (5%) also saw positive rates.