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Brazil’s Machinery Industry Fell 18% in 2009, But There Are Signs of Recovery

Machine Brazil’s capital goods industry posted revenues of 64 billion Brazilian reais (US$ 34.8 billion) last year. The figure represents a reduction of 18% compared with 2008, in nominal terms, according to information disclosed by the Brazilian Machinery Manufacturers Association (Abimaq).

In the last month of 2009, however, there was growth of 7.3% over November, and of 0.6% over December of the previous year, with revenues of 6.26 billion reais (US$ 3.4 billion).

According to a press release issued by the Abimaq, the president of the organization, Luiz Aubert Neto, stated that the resumption towards the end of the year was strongly influenced by the Program for Sustaining Investment of the Brazilian Development Bank (BNDES), which consists of a line of financing with annual interest rate of 4.5%.

To the executive, the program, coupled with the reduction of the Tax on Industrialized Products (IPI) that the government granted to various sectors, prevented revenues from dropping further during the year. In the face of the international financial crisis, the Brazilian government adopted a series of measures for encouraging economic activity.

The Abimaq has also informed that the number of jobs in the industry totaled 233,928 in 2009, a figure 3.7% lower than in 2008. In December, however, there was a slight growth, of 0.1%. Albeit low, the increment confirms the industry’s recovery trend, according to the organization.

With regard to exports, there was a drop of over 40% and revenues from shipments totaled approximately US$ 13 billion. Imports, in turn, totaled US$ 22 billion, a 14% drop compared with 2009. As a consequence, the industry recorded a trade deficit of US$ 9 billion, a figure 23% greater than in the previous year.

The reduction of foreign sales was the main contributing factor to the drop in industry revenues in 2009. In the domestic market, the slowdown was not as sharp, at a rate of 12%.

Anba

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