Brazil's industrial output grew last year at its fastest pace since 2004, jumping 6% boosted by domestic demand according to official data. The surge in industrial activity was broad, driven by a sharp increase in the availability of credit allowing Brazilian consumers to buy more cars and home appliances.
The government's IBGE statistics institute points out that industrial output was up in 21 of 27 sectors averaging 6% in 2007 compared to 8.3% in 2004, 2.8% in 2006 and 3.1% in 2005. Leading sectors were the automotive industry, 15.2% and the production of machinery and equipment 17.7%.
On annual basis, industrial production rose 6.4% in December compared to the same month in 2006.
However in December and November output slumped in 16 of the 27 industrial sectors tracked by IBGE, dragged down by a 6.2% drop in automobile production. It was the second consecutive month that auto production shrank after surging 8.7% in October. This is attributed to companies clearing end of the year inventories.
In broader categories, output of capital goods such as machinery fell 0.2% in December from November after four straight months of increases. Consumer goods dropped 2.1% after falling 0.6% in November, while output of intermediate goods rose 1%.
Meantime industrial employment in December grew by 0.5% and the number of hours worked 3.8% over the previous month according to Brazil's Confederation of Industry.
In 2007, compared to 2006 employment in industry rose 3.8% and hours worked 4%.
"Industrial goods sales rates and hours worked in 2007 are similar to those of 2004, considered the most dynamic year of the decade," said CNI.