(Adds details from IBGE report, context) RIO DE JANEIRO, April 1 (Reuters) - Brazilian industry shrank less than expected in February, but a recovery looked unlikely as the economy continues to sink toward a recession.
Industrial production in Brazil dropped 0.9 percent in February from January, government statistics agency IBGE said on Wednesday. That beat the median estimate for a 1.6 percent decline in a Reuters survey of 28 analysts.
Still, most economists say the steady erosion of Brazilian industry over the past three years is not about to reverse course in the short term. A drop in commodities prices and greater fiscal tightening is weighing on the nation's economy, which many analysts expect to fall into recession this year.
Hard-to-fix structural problems, such as low productivity, poor infrastructure at home and high tax and labor costs are widely cited as further barriers to growth among local manufacturers.
Production dropped in 11 of 24 industrial segments on a monthly basis, with automobile manufacturing contributing the most to the decline.
Durable goods retreated 0.4 percent from January and 25.8 percent from February 2014 as heavier household debt loads and higher interest rates sapped demand for big-ticket items.
Production retreated 9.1 percent in February from a year earlier, less than the median forecast for a 10.25 percent decline.
IBGE revised January's production increase from December down to 0.3 percent from a previously reported 2.0 percent. January's decrease from a year earlier was revised to 5.1 percent from 5.2 percent.
(Percent change) Feb/Jan Feb'15/Feb'14 Capital goods -4.1 -25.7 Intermediate goods -0.1 -4.0 Consumer goods -0.4 -13.4 Durable consumer goods -0.4 -25.8 Semi-durable and -0.5 -8.9 non-durable consumer goods Industrial output -0.9 -9.1 (Reporting by Rodrigo Viga Gaier and Pedro Fonseca; Editing by Chizu Nomiyama and Lisa Von Ahn)