(Reuters) – Brazil’s industrial output likely dropped for a second straight month in April as inventories piled up, adding to signs economic growth continued to weaken after a disappointing first quarter, a Reuters poll showed.
Output from Brazilian factories and mines fell a seasonally adjusted 0.3 percent from March BRIO=ECI, according to the median of 23 forecasts in the Reuters poll.
Production dropped 0.5 percent in the prior month.
Shrinking industrial output held back Brazil’s economic growth in the first quarter, according to government data BRGDP=ECI on Friday. Automobile producers BRAOPM=ECI and other manufacturers cut back production as demand cooled, hurt by higher interest rates and rising inflation.
“The worst thing is that (weak) confidence data from last month and the World Cup kicking off in June also do not suggest any stronger recovery in the second quarter,” wrote Rosenberg & Associados economists in a research note.
A private survey BRPMIM=ECI earlier on Monday showed Brazil’s manufacturing shrank at the fastest pace in 10 months in May.
Brazil’s economy has been stuck in low gear since 2011, which contributed to a credit downgrade by Standard & Poor’s to just one notch above junk status. Combined with dimming confidence and high inflation, slow growth has complicated President Dilma Rousseff’s hopes of being reelected in October.
Compared with April 2013, Brazil’s industrial output likely plunged 5.8 percent BRIOY=ECI.
Brazil’s statistics agency IBGE releases the April industrial report on Wednesday at 9 a.m. local time (1200 GMT).
Forecasts for the monthly result ranged from an increase of 0.4 percent to a drop of 1.5 percent, while estimates for the year-over-year change ranged from a rise of 3.0 percent to a decline of 6.6 percent.