(Adds background, PMI data, table) BRASILIA, April 1 (Reuters) - Brazil's industrial output fell in February at the fastest pace in more than two years, dragged down by a further steep decline in production of durable goods such as cars and home appliances, government data showed on Friday.
Output at factories and mines fell a seasonally adjusted 2.5 percent in February from January, erasing the unexpected gains seen in January when there was a 0.4percent increase, statistics agency IBGE said.
The data marked the steepest monthly decline since December 2013, IBGE said. It was slightly worse than the median estimate in a Reuters poll of economists that had projected a decline of 2.3 percent.
Production in February retreated 9.8 percent from a year earlier.
Brazil's economy has been going through the second year of what is expected to be its worst recession in more than a century. The central bank sees the economy shrinking 3.5 percent this year following a contraction of 3.8 percent in 2015.
One ray of hope for manufacturing came in a privately conducted survey for March, which showed it contracting at a slower rate than in February.
The Purchasing Managers' Index, compiled by research firm Markit, rose to a seasonally adjusted 46.0 in March, up from a three-month low of 44.5 in February.
The headline PMI index remained well below the 50 threshold that indicates activity growth. However, new export orders rose at the fastest pace in 6-1/2 years after Brazil's currency, the real, weakened to near record lows.
(Percent change) m-m y-y Capital goods 0.3 -25.8 Intermediate goods -2.0 -8.5 Consumer goods -3.2 -8.1 Durable consumer goods -5.3 -29.3 Semi-durable and non-durable consumer -0.6 -2.0 goods Industrial output -2.5 -9.8 (Reporting by Silvio Cascione Editing by W Simon)