By Asher Levine

SAO PAULO, Feb 1 (Reuters) - Brazilian industrial output

failed to advance in December, posting 0.0 percent growth from

November, capping a year in which manufacturing slumped despite

government efforts to stimulate its revival.

Output from Brazilian factories and mines

contracted 3.6 percent in December from a year earlier,

government statistics agency IBGE said on Friday, better than

the 4.7 percent decline forecast in a Reuters survey.

The data follows a 1.1 percent year-over-year contraction in

November, revised down from a previously-reported 1 percent on

Friday.

With December's data, industrial output in Brazil closed

2012 with a 2.7 percent contraction compared with 2011, and

remained at nearly the same level as early 2010.

President Dilma Rousseff's government has attempted to boost

the sector through a series of stimulus measures, trade barriers

and tax breaks, although the production figures suggest Brazil's

manufacturers responded little last year, if at all.

Much of the blame for the three-year long period of mediocre

industrial growth has been placed on weak global demand, as well

as the structural challenges facing manufacturers in Brazil.

Chief among them is labor. Unemployment fell to an all-time

low in December, piling additional pressure on manufacturers

already struggling with low productivity, high taxes, and

infrastructure bottlenecks.

In addition, concerns over government intervention in the

private sector and lackluster economic growth in Brazil have

sapped investor confidence, leading to a decline in capital

goods production, which was the biggest contributor to

December's fall.

December's industrial production failed to expand from

November, better than the 0.35 percent drop forecast

in the survey. Forecasts for the monthly change ranged from a

drop of 1.8 percent to an increase of 0.3 percent.

The decline in industrial production from November to

October was revised to 1.3 percent on Friday, from a previously

reported 0.6 percent.

Of the 27 industrial sectors surveyed by IBGE, 14 contracted

in December from November, including machinery and office

equipment.

In broader industrial categories, production of capital

goods fell 0.8 percent in December from November, while durable

consumer goods fell 0.5 percent and intermediate goods dropped

0.1 percent.

(pct change) Dec/Nov Dec12/Dec11 2012/2011

Capital goods -0.8 -14.7 -11.8

Intermediate goods -0.1 -2.5 -1.7

Consumer goods 0.5 -1.4 -1.0

Durable consumer goods -0.5 -3.5 -3.4

Semi-durable and 0.9 -0.8 -0.3

non-durable consumer goods

Industrial output 0.0 -3.6 -2.7

For details on the IBGE industrial output figures see: http://www.ibge.gov.br/home/presidencia/noticias/noticia_visualiza.php?id_noticia=2315&id_pagina=1

(Reporting by Rodrigo Viga Gaier and Diogo Gomes; Writing by

Asher Levine)

Keywords: BRAZIL ECONOMY/INDUSTRY

(asher.levine@thomsonreuters.com)(+55-11-5644-7756)(Reuters Messaging: asher.levine1.thomsonreuters.com@reuters.net)

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