SAO PAULO (Reuters) - Brazil's industrial output probably edged up slightly in August after a sharp decline in the previous month, helped by stronger car and steel production, a Reuters poll showed on Monday.
Output from Brazilian factories and mines probably rose a seasonally adjusted 0.15 percent in August from July, up from a decline of 2.0 percent in July from June, according to the median forecast of 22 economists polled by Reuters.
The month-on-month recovery should underpin hopes that the slowdown in Brazilian economic activity in the third quarter could be milder than previously expected.
However, an expected decline in annual output data will probably curb any enthusiasm. Compared with August 2012, Brazil's industrial output likely declined 0.75 percent, reversing course after an annual increase of 2.0 percent in the previous month.
Industrial output "has been volatile since the beginning of the year," wrote Marcelo Carvalho, head of Latin America economic research at BNP Paribas, in a research note. "Special attention should be paid to the capital goods sector, which has showed the most strength this year."
A tentative recovery in industrial output helped support economic growth in Brazil in the first half of this year, following several stimulus measures such as tax breaks and credit incentives from President Dilma Rousseff's government.
Automobile output in Brazil rose 9.0 percent in August from July, boosted by stronger foreign demand as a result of a weaker currency, which makes locally made goods cheaper in dollars.
Raw steel production rose 4.5 percent to 3.0 million tonnes from a year earlier, while rolled steel rose 3.6 percent to 2.3 million tonnes, according to the country's largest group representing steelmakers.
Brazilian statistics agency IBGE will release the numbers on Wednesday at 9 a.m. local time (1200 GMT).
Forecasts for the monthly data ranged from a decline of 0.5 to an increase of 0.9 percent. Estimates for the year-on-year change ranged from a 1.8-percent drop to a 0.3 percent rise.
Reporting by Silvio Cascione