Led by a surge in capital goods output, industrial production in Brazil has recovered vigorously over the past several months. In July, although the gain in capital goods was interrupted, the overall index rose 0.5%, its fifth consecutive increase. From October 2002 through June 2003, Brazil's industry shrank by 8.0%, but since that trough, output is up 12.6%.

Brazil has a large, diverse economy. Its GDP last year was $497 billion, second only to Mexico ($626 billion) in the Latin American region. By comparison, Argentina's GDP was $130 billion in 2003 and that of Chile, $72 billion. The diversity shows in its industry, where the recent growth in production has been shared among such varied sectors as motor vehicles, metal products, minerals, rubber products, paper products and textiles.

The recent rise in capital goods is attributed mainly to "industrial transportation equipment", that is, trucks and buses. Output of automobiles and parts has also increased. Less vibrant sectors have included consumer nondurables, as seen in the table below, particularly processed food products. Petroleum refining has been falling steeply.