Surprising: Automotive Sector Grows 12% in July, and Industry Reaches Record High of 6.1% for the Year

Written by Fabio Lucas Carvalho

Published on 04/09/2024 at 19:37

Updated on 04/09/2024 at 19:38

Foto: Reprodução

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Driven Growth: Automotive Sector Registers 12% Expansion in July and Contributes to Historic 6.1% Increase in Industry Over One Year

The Brazilian industry showed significant growth in July 2024, highlighted by the automotive sector, which recorded a 12% increase. According to data from the Monthly Industrial Survey (PIM – Brazil), released by the IBGE, the industry as a whole grew by 6.1% compared to the same month in 2023. Year-to-date, the industrial sector shows a rise of 3.2%, and over the last 12 months, an expansion of 2.2%.

These figures place the Brazilian industry 1.4% above the pre-pandemic level reached in February 2020. However, the sector is still 15.5% below the historical peak recorded in May 2011. The survey included 18 industrial activities that showed growth, with the motor vehicles, trailers, and bodies segment being the most impactful.

Automotive Sector Grows 12% in July and Industry Reaches Historic High of 6.1% This Year – Photo: AB

The Positive Impact of the Automotive Sector

The motor vehicles sector had a remarkable performance in July, with an increase of 12.0%. This accelerated growth was greater than the 4.8% recorded in June. According to André Macedo, manager of PIM Brazil, automobiles were fundamental to the positive outcome, with auto parts also contributing, although to a lesser extent.

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Expressive Results in Other Sectors

In addition to the automotive sector, several other industrial branches also positively contributed to the July results. The metal products sector grew by 13.9%, while the information technology, electronics, and optical products sector registered a 24.4% increase. The rubber and plastics sector grew by 11.6%, and machinery and equipment advanced by 10.8%.

Other notable sectors included furniture, which saw a growth of 26.9%, and the metallurgy sector, which recorded an increase of 4.8%. The beverages sector grew by 8.4%, while the food products sector had a more modest increase of 1.3%. The most expressive growth was observed in the miscellaneous products sector, with a rise of 19.4%.

Challenges for Some Sectors

Despite the positive results in many sectors of the economy, there were some significant declines that impacted the average of the Brazilian industry. The coke, petroleum derivatives, and biofuels sector was the main contributor to this impact, with a decline of 0.6%. This reduction was due to lower production of items such as diesel oil, naphthas, liquefied petroleum gas (LPG), and ethanol.

The Brazilian industrial production as a whole recorded a decrease of 1.4% from June to July 2024, interrupting the growth observed in the previous month when there was an increase of 4.3%. This setback was partly a result of the significant increase in June, driven by the resumption of production in units affected by the rains in Rio Grande do Sul in May 2024.

Sectors with Negative Performance

Among the sectors that registered production declines, the food products sector had the most significant negative impact, with a reduction of 3.8%. This drop eliminated the 2.6% increase recorded in June.

The sector was affected by the lower production of sugar due to drought in the Central-South region of the country, as well as the decline in cattle and soybean-derived products.

The coke, petroleum derivatives, and biofuels sector also showed negative performance in July, with a 3.9% drop, interrupting two consecutive months of growth. The same occurred with the extractive industries, which recorded a 2.4% decline, influenced by lower production of iron ore and oil.

Outlook

Regarding major economic categories, the capital goods and durable consumer goods sectors continued to show positive results in July, with increases of 2.5% and 9.1%, respectively. These advances intensified the growth already observed in June when the sectors recorded increases of 0.8% and 5.9%.

On the other hand, the semi and non-durable consumer goods sector saw a significant drop of 3.1% after a 4.5% increase in the previous month. The intermediate goods segment also recorded a slight decline of 0.3%.

Despite the slowdown in July, the Brazilian industry remains on an upward trajectory, with a cumulative growth of 1.2% since December 2023, indicating a recovery and stability scenario for the coming months.

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Surprising: Automotive Sector Grows 12% in July, and Industry Reaches Record High of 6.1% for the Year

Driven Growth: Automotive Sector Registers 12% Expansion in July and Contributes to Historic 6.1% Increase in Industry Over One Year

The Positive Impact of the Automotive Sector

Expressive Results in Other Sectors

Challenges for Some Sectors

Sectors with Negative Performance

Outlook

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Surprising: Automotive Sector Grows 12% in July, and Industry Reaches Record High of 6.1% for the Year

Driven Growth: Automotive Sector Registers 12% Expansion in July and Contributes to Historic 6.1% Increase in Industry Over One Year

The Positive Impact of the Automotive Sector

Expressive Results in Other Sectors

Challenges for Some Sectors

Sectors with Negative Performance

Outlook

Mother and daughter build a 70 m² house with more than 8,000 discarded glass bottles and impress with their creativity; known as the Casa de Sal, the property is located on Itamaracá Island, in Pernambuco.

Workers were opening a new road connection near the Marginal Tietê when they found, in the underground of the construction site, remnants of locomotives, wagons, and boilers from the 19th century linked to the forgotten history of Lapa.

Instead of burning or burying old tires, an American city is transforming about 2,000 of them into the street itself, paving its first sections with a quieter and more durable rubber asphalt.

He transformed an abandoned plastic water tank into an underground house in the “hobbit hole” style, using only repurposed pallet wood, without heavy machinery or expensive labor.

China transforms desert-devastated area into the world’s largest artificial forest, planting trees for 60 years, blocking sand that reached Beijing, and creating a “green lung” of 92,000 hectares in a region once considered lost.

The river that “dies” in the desert never reaches the sea and yet gives life to one of Africa’s largest natural refuges in a truly impressive way.

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