November 1, 2017 / 12:37 PM / in a year

UPDATE 1-Brazil industry disappoints in September for a second month

 (Adds context, details)
    By Bruno Federowski
    SAO PAULO, Nov 1 (Reuters) - Brazil's industrial output was
below expectations in September for a second straight month,
highlighting the lingering struggles of a sector trying to
recover from a deep recession.
    Industrial output rose 0.2 percent from August, reversing
the previous month's decline but lagging the median economist
forecast of 0.6 percent in a Reuters poll.           
    The disappointing figures highlight the differing fortunes
of Brazilian households and industrial firms as Latin America's
largest economy exits its worst recession in a century. 
    Falling unemployment, lower interest rates and slow
inflation have increased consumer spending but that has yet to
translate into a substantial boost to manufacturing as companies
grapple with high debt loads and bloated inventories.
    Still, rising auto production has provided a welcome relief
this year, driven by strong exports. National automaker group
Anfavea expects that trend to continue in 2018, forecasting
sales and output growth of more than 10 percent.             
    Industrial output rose 2.6 percent in September from the
year before, below economists' median estimate for a 3.1 percent
    The report is the latest in a string of underwhelming
economic readings since August, fueling speculation that a
government measure allowing workers to make early withdrawals
from a severance fund may have contributed more to mid-year
growth than originally thought.
    A central bank weekly survey of economists forecast
industrial output to rise 2 percent in 2017 and 2.98 percent in

 (Reporting by Bruno Federowski; Editing by Bernadette Baum)
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