Brazil’s packaging output rebounds in second quarter, but 2026 growth seen at 0.2%

Packaging production outpaces manufacturing

Brazilian packaging production increased 2.4% in the second quarter of 2026 from the previous three months after seasonal adjustment, according to an FGV Ibre study prepared for the Brazilian Packaging Association, Abre. The result marked a recovery for the industry and compared with a 0.1% contraction in Brazil’s broader manufacturing sector over the same period.

The improvement was spread across the main packaging materials. Wooden packaging recorded the strongest quarterly increase at 11.4%. Metal and glass packaging production rose 2.2% each, followed by paper and corrugated board at 2.1%. Plastic packaging, the sector’s largest employer, expanded 1.6%.

Employment rises despite a near-flat annual outlook

The second-quarter rebound is not expected to continue at the same pace through the rest of the year. The study forecasts packaging production growth of only 0.2% for 2026, with an estimated range from a 0.2% decline to a 0.6% increase. That would leave annual activity close to stable despite the stronger performance between April and June.

Formal employment has moved faster than production. The packaging chain employed 286,500 workers in June, an increase of 3.2% since the beginning of the year. Formal employment in manufacturing rose only 0.5% over the same period. Plastic packaging accounted for 56% of formal jobs in the chain, while corrugated board represented 14% and paper 10%.

Trade remains balanced as exports accelerate

Brazil’s packaging trade was almost exactly balanced in the first seven months of 2026. Valor reported that exports reached $363.9 million from January through July, up 11.8% from the same period of 2025. Plastic packaging generated 35.8% of export sales and metal packaging accounted for 34.4%.

Imports totaled $363.3 million, increasing 2.2% year on year. Metal packaging represented 33.2% of imports and plastic products 30.4%. The $0.6 million difference between exports and imports left the industry’s trade balance effectively at zero, even as outbound sales grew substantially faster than inbound shipments.

Consumer demand supports activity, but credit conditions weigh

Household consumption is forecast to grow 2% in 2026, compared with 1.3% in 2025. Several important packaging customers expanded production during the first half: beverage output rose 3.9%, while soap and detergent production increased 2.5%. E-commerce also continued to gain importance, accounting for 20.2% of retail sales in the second quarter.

These demand drivers face a weaker macroeconomic environment. FGV Ibre expects Brazilian GDP growth to slow to 1.8% in 2026 from 2.3% in 2025. IPCA inflation is projected to finish the year at 5%, above the target, while the Selic interest rate is expected to remain high at 13.75% at year-end.

High household indebtedness and defaults are additional constraints, alongside the prospect of fiscal adjustment in 2027. For packaging producers, processors and buyers, the combination points to uneven order volumes in the second half: consumption and e-commerce provide support, but expensive credit and weaker economic growth limit the scope for sustained capacity expansion.