Brazil Industrial Output Falls 0.6% in August

Overview

• IBGE reported that industrial production fell 0.6% month‑on‑month in August, reversing recent monthly gains and marking a 1.2% drop from August 2025.
• The August result surprised markets, coming in below the VALOR DATA median forecast of a 0.2% rise and following a downward revision of July from +0.2% to +0.1%.
• Declines were broad: all four major categories fell in August with capital goods −0.6%, intermediate goods −0.2%, durable goods −1.0% and semi/non‑durables −1.7%.
• Sharp losses in specific branches drove much of the headline move, led by tobacco production down 23.4% and pharmochemical and pharmaceutical products down 5.5%, while food products rose 1.0% as the main positive contributor.
• Despite the monthly drop and the annual fall, the industry still shows small cumulative gains of 0.8% year‑to‑date and 0.6% over the last 12 months, though the August shock could weigh on investment demand and near‑term employment in affected plants.