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Employment Rate Up But Hours Worked Down in Brazil

Brazil’s National Confederation of Industry (CNI) released, yesterday, its industrial indicators for July. The most significant piece of data is the rise in the employment rate.

For the month, the index was 0.95%, the biggest increase since 1995. The rate was positive during each of the first seven months this year. And, compared with 2003, the overall increase amounted to 4.11%.

Although workers’ salaries remained stable in July, the July/July comparison between this year and last shows an 8.29% growth in real salaries, a pace that can only be likened to the first semester of the Real Plan (July-December, 1994).

For Flávio Castelo Branco, who coordinated the research, this improvement in the level of employment indicates a resumption of activity.


“If the national scene didn’t inspire security, companies wouldn’t hire,” he explains.

Utilization of industrial capacity broke another record, hitting 83%. That is, companies are using nearly all their productive capacity. The previous high, 82.5%, occurred in June.

Nevertheless, two indices failed to accompany the upward trend. Industrial sales fell 3.31% in July, interrupting four consecutive months of growth. The index was 19.45%.


Another decline was in the total number of hours worked, down 0.24% in comparison with July, 2003, when the rate of growth stood at 7.56%.

According to Castelo Branco, these indices suggest greater economic stability.


In his opinion the growth figures in recent months were very robust, out of synch with reality.


Consequently, Brazil’s Gross Domestic Product should continue growing at the rate of 4.5%.


“If the figures didn’t drop, our growth would be huge and unreal,” he explains.

The coordinator assures that the declines in the indicators do not represent a crisis. “These retreats show data closer to reality,” he sums up.

For Castelo Branco, the economic scenario for 2005 implies the need for new investments in industry, since there will be an increase in demand.


In his view, without new resources in this sector, it will not be possible to energize the market, generate jobs and income, and stimulate growth in industrial production capacity.

Agência Brasil
Reporter: Lilian Macedo
Translator: David Silberstein

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