The decline reached 10.9 percent year-over-year, its highest level since April 2009. However, the tumble was smaller than the expected 11.4 percent.
According to the Instituto Brasiliero de Geografia e Estatistica (IBGE), industrial production in Brazil fell 10.9 percent year-over-year in September 2015. A few figures should help put this number in perspective.
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In August, production had descended 8.8 percent. For September, analysts were modeling an 11.4 percent decline in industrial production. Brazilian industry hadnt seen a deterioration this big since April of 2009.
What Drove The Decline?
As per official data released on Wednesday, the marked decline in industrial production was principally driven by sluggishness in the automotive and metallurgical sectors, which were, in time, affected by the strong recession the country has been experiencing.
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However, the production of coke (a residue of coal), biofuels and oil derivatives helped moderate the decline, the report assured.
Month-over-moth, the fall in production reached 1.3 percent, once again beating analyst estimates, which called for a 1.5 percent decline, according to Reuters.
For the full year, experts are expecting a 3 percent contraction in the Brazilian economy. This figure is anticipated to shrink to 1.5 percent in 2016.
Stocks On The Move
Following the release of the official economic data, shares of state-controlled Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) were trading down more than 6 percent on Wednesday afternoon.
The iShares MSCI Brazil Index (ETF) (NYSE:EWZ) was also down roughly 2.3 percent, while the Market Vectors Brazil Small Cap ETF (NYSE:BRF) fell approximately 0.6 percent.
Other Brazilian stocks declining on Wednesday included Vale SA (ADR) (NYSE:VALE), Gerdau SA (ADR) (NYSE:GGB) and Companhia Siderurgica Nacional (ADR) (NYSE:SID).
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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