Industry in Brazil Wants to Grow Installed Capacity by 15%

Industry ABCBrazil’s industry plans to expand installed capacity by 14.6% on average this year. The rate is the highest in eight years, as shown by a survey disclosed by the Getúlio Vargas Foundation.

The Industry Investment Survey shows that for the 2010-2012 period, sector forecasts are for expansion of 23.8%, higher than last year’s 21.2% estimate for the 2008-2010 period. The percentage, however, is lower than projections for 2008, when they had reached 25.1%.

The consumer goods sector, which includes furniture and vehicles, had its highest expansion forecast. The capital goods (machinery and equipment) and intermediary goods (garments, shoes and food) sectors came in tow, with average expansion forecasts of 15.4% and 13.8%, respectively.

For the 2010-2012 period, the greatest rate of investment in productive capacity was also verified in the consumer goods sector, with 27.1%. In capital goods, the rate rose from 17.1% in 2009 to 25.9% in 2010, whereas in intermediary goods, the forecast for this year is 21.7%, against 19.9% last year.

Among the companies researched, 80% consider the level of domestic demand a positive influence for investment in 2010, whereas 40% of industries said that foreign demand was a positive sector for the investment forecast.

Regarding financing conditions for this year, 42% of the companies interviewed consider forecasts positive, the best result since the research started being executed. Interest rates, in turn, were considered a positive influence by 31% of the market and negative by 29%. To the FGV, despite the divided opinions, this is also the best result for the series over the last four years.

For execution of the January/February 2010 Industry Investment Survey, Getúlio Vargas Foundation heard 723 companies between January 4th and February 26th of this year. Together, these companies totaled revenues of 460.3 billion Brazilian reais (US$ 255.6 billion) and employ 880,000 people. The objective of the research is to supply information regarding the route of productive investment in the industrial sector.

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