Brazil's industrial sector experienced a subdued performance towards the end of 2022 and into the current year, with little change observed in the industrial production index (IPI) on a monthly basis from November 2022 until February 2023. The Brazilian Institute of Geography and Statistics, the publishing authority for the IPI, is yet to release the March IPI data, with an update expected on May 10th.

However, timely daily data on air pollution in the State of Sao Paulo, which accounts for a significant 30% of the national industrial GDP, suggests that the industrial sector may have already entered its seasonal upswing in March 2023. Specifically, the average concentration of inhalable particles in Sao Paulo rose by 9.3% m/m and 7.4% m/m, seasonally adjusted, in February and March, respectively, offsetting the sharp drop of 12.8% m/m in January.

To calculate the average concentration of inhalable particles, we selected 10 stations located in industrial cities and logistical hubs within the State of Sao Paulo. This air pollution data, an expansion of the CEIC High Frequency Database, is released by the local Environmental Company based on data from various monitoring stations across the state. Given the high correlation between the IPI for the State of Sao Paulo and the IPI nationwide, the pollution data for Sao Paulo serves as a timely and reliable indicator of Brazil's industrial performance.