MercoPress. South Atlantic News Agency

Brazil's industry reported to be growing steadily

According to the Industrial Survey, all expectation indexes for September stood at optimistic values

Brazil's industrial activity has been reported to have increased in August and has a bright future ahead, according to a survey from the National Industry Confederation (CNI).

The report showed growth in production and employment for the fourth consecutive month and the third monthly high in the use of installed capacity. The research also found an increase in the production pace compared to July figures.

“In this scenario, expectations remain optimistic for September 2022, with demand, exports, the number of employees, and raw material purchases expected to rise in the coming months. The intention to invest advanced for the second consecutive month, reaching the highest value for the month of September since the beginning of the series,” the CNI said.

The production evolution index registered 54.5 points in August, a result above the 50-point dividing line, which means that production increased compared to July.

“It is noteworthy that the average value for the month of August is 52.7 points, i.e., industrial production usually increases in the passage from July to August 2022. As the August 2022 index is slightly above the average for the month, the result indicates an increase in the pace of production above the average for the month,” the CNI explained.

Industrial employment showed an increase in August compared to July. The index for the evolution of the number of employees was 52.2 points, above the 50-point dividing line that separates falling from rising in employment. According to the CNI, the average value for the months of August is 49 points, below the 50-point value, i.e., there is usually a drop in employment in the passage from July to August.

The Utilization of Installed Capacity (UCI) increased by 2 percentage points between July and August 2022, to 73%. Besides being the highest value in 2022, it is the highest value for the month of August since 2013, when the UCI reached 74%.

The effective capacity utilization index was recorded to stand at 47.7 points in August, an increase of 1.7 points from the previous month.

The level of inventories of finished goods also increased from July to August. The inventory level evolution index was 51.6 points, i.e., above the 50-point dividing line, which indicates inventory stability.

When measured by size, the level of inventories increased among small, medium, and large companies, with indexes of 50.8, 50.8, and 52.4 points, respectively. For small companies, this is the first month of August to indicate an expansion in inventories since the beginning of the series. “With this, the month of August registered the largest excess of inventories in relation to the planned for the year,” highlighted the entity.

According to the Industrial Survey, all expectation indexes for the month of September remain above 50 points.

The demand expectation index stood at 59.3 points, a slight drop of 0.4 points from the previous month. Expectations regarding the number of employed people stood at 53.9 points, a 0.2 point increase from August to September, the highest since September 2021.

The raw material purchase expectations index registered 56.9 points, a 0.4-point drop against August. The export quantity expectation index stood at 52.8 points, maintaining relative stability from August when the index registered 52.9 points.

The investment intention index reached 59 points, the highest value for the month of September since the beginning of the CNI series. The result represents an increase of 2.1 points compared to the previous month.

Between September 1 and 12, 1,781 companies were surveyed, 696 of them small, 637 medium-sized, and 448 large.

(Source: Agencia Brasil)