Brazil’s Industry to Hire and Invest More in 2005

The latest quarterly survey of Brazil’s manufacturing sector (Sondagem Conjuntural da Indústria de Transformação), which has been conducted regularly for 38 years by the Getúlio Vargas Foundation’s Brazilian Institute of Economy (Ibre/FGV), found that the sector is optimistic about 2005.

Although the survey was released in December, it was made in October; that is, before two increases in the country’s benchmark interest rate (Selic) and the drop in the value of the dollar against the real. It reflects sector expectations regarding 2005.


According to Aloisio Campello, who coordinated the survey, it interviewed 1,003 industries in 24 states, which employ 967,434 workers and have annual revenue totalling US$ 135 billion (360 billion reais), or around 25% of total sector revenue. The survey, explains Campello, focused on six areas.


Revenue – 83% of those interviewed said they expected a rise in revenue in 2005. That was up from 80% in the prior survey (in October 2003, which measured expectations for 2004).


Business – In October 2002, 48% of those interviewed said they expected more business in 2003. In October 2003, once again, 48% expected more business for the next year. In October 2004, the number had risen to 67%, with regard to 2005.


Hiring new workers – In the last three surveys, the number of those interviewed who said they expected to hire new workers in the next year rose from 29% (2002), to 35% (2003) to 47% last October.


Investments – In the last three surveys, the number of those interviewed who said they expected to increase investments in the next year rose from 33% (2002), to 45% (2003) to 52% last October.


Exports – In the last three surveys, the number of those interviewed who said they expected to increase exports in the next year fell from 64% (2002) to 55% (2003), and rose to 63% last October.


Imports – By showing that they expect to increase imports, industries are saying they expect to increase production. In the last two surveys, the number of those interviewed who said they expected to increase imports in the next year has gone from 31% to 43%.


Translation: Allen Bennett
Agência Brasil

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