Brazil Industry’s Installed Capacity Up, But Still 3% Below Last Year

Paper factory in Brazil For the fourth month in a row, the use of installed capacity by the Brazilian processing industry has risen. The rate of use went from 79.4% in April to 79.8% in May, not taking seasonal influences into account, according to figures from the Industrial Indicators survey, disclosed this Tuesday, July 7, by the National Confederation of Industries (CNI) in BrasÀ­lia, the capital of Brazil.

The sectors with the least idle capacity in the Brazilian industrial park in May were: other transport equipment (90.8%), refinement and alcohol (89.6%), pulp and paper (88.1%) and leathers and shoes (87.5%). However, even with the increased use of capacity in most of the sectors surveyed, the use of installed capacity is still 3.3% below the level recorded in the same month of last year, when the rate was 83.1%.

According to the survey, there is not a consolidated trend of recovery in industrial activity yet. There was growth in two indices (use of installed capacity and actual revenues), whereas the number of hours worked and the employment rate have maintained their trend of decline during the same period.

Revenues grew by 1.1% in May over the previous month, discounting seasonal influences. The indicator has increased in three of the five first months of 2009, which does not represent a trend of recovery. Still, the revenues recorded in May are 7.7% lower than recorded in the same month of 2008.

The indicator of hours worked, not counting seasonal influences, saw a 0.5% reduction in May in comparison with April. After a sharp decline in the number of hours worked in November and December 2008, the indicator has not yet shown a trend of recovery.

The employment rate, not counting seasonal influences, has decreased by 0.3% in May compared with the previous month. This was the indicator's seventh consecutive monthly reduction.

In comparison with the same month of the previous year, the rate of reduction in the employment rate rose to 4.1% in May – the sharpest reduction using that basis for comparison since the series was initiated, in January 2003.

The worsening of the labor market continues to impact negatively on the wage mass, which saw a reduction of 4.7% in May compared with the same month of 2008.

CNI

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