Business · Economy · 6 hrs ago
Brazilian industry weakens in third quarter, with output forecast to fall 0.4%
Brazilian industry weakened in the third quarter, according to Fiesp, an industry federation based in São Paulo.
The federation forecasts that manufacturing output will fall 0.4% in 2026.
During the quarter, real sales fell 0.2%, average real wages fell 1.1%, and hours worked in production dropped 0.4%.
Capacity use also declined, reaching 78.2% in September, below its average for the past three years.
High interest rates and US surcharges on Brazilian goods are among the pressures Fiesp identifies, alongside costly raw materials and weak domestic demand.
The federation says household debt burdens and late loan payments are weighing on demand, and it sees risks to the sector continuing into 2027.
Brazilian manufacturing output is forecast to fall 0.4% in 2026, according to the Federation of Industries of the State of São Paulo (Fiesp).
Fiesp said the third quarter was negative for industry and pointed to a year-end slowdown in industrial activity.
Across the quarter, real average wages fell 1.1%, hours worked in production fell 0.4% and real sales fell 0.2%.
Fiesp cited high interest rates, US surcharges on Brazilian goods and raw-material costs among the sector’s constraints.
The federation also said domestic demand remained weak amid household income commitments and loan defaults.
- Who
- The Federation of Industries of the State of São Paulo (Fiesp).
- What
- It said industrial activity weakened in the third quarter and forecast a 0.4% fall in Brazilian manufacturing output in 2026.
- When
- The third quarter of 2026; the article was published on October 30, 2026.
- Where
- Brazil.
- Why
- Fiesp cited high interest rates, US surcharges on Brazilian products, raw-material costs and weak domestic demand.
This story does not have two clearly opposing sides.
Capacity utilization stood at 78.7%, the level from which Fiesp said it began declining.
Capacity utilization was 78.5%.
Sales rose 0.4% and wages edged up 0.1%, while hours worked fell 0.4% and capacity utilization dropped to 78.2%.
- Output forecast
- Down 0.4% in 2026
- Quarterly real average wages
- Down 1.1%
- Quarterly production hours
- Down 0.4%
- Quarterly real sales
- Down 0.2%
- September capacity utilization
- 78.2%, compared with a three-year average of 78.7%
- Household income committed to debt
- 28.9% of annual income
What people are saying
the third quarter of the year was negative for industry
an end-of-year slowdown in the country's industrial activity