Brazil’s industrial indicators for February, released yesterday by the National Confederation of Industry (CNI), registered an upward trend in comparison with January.
The most encouraging finding was the expansion of the labor market, which, according to the CNI, “remains vigorous,” especially in the area of industrial employment.
The number of workers employed in the manufacturing sector rose 0.23% in February, in comparison with January, when the seasonally adjusted data are considered.
February was the 14th month in a row to show a positive variation in this respect. The survey is conducted on a monthly basis by the CNI, which gathers information from around three thousand firms all over the country.
For the coordinator of the CNI’s Economic Policy Unit, Flávio Castelo Branco, this positive trend, which hasn’t shown any signs of abating, “is an indication that firms are viewing the difficulties as temporary and transitory and that the long term growth trend of the Brazilian economy and of industry, in particular, will persist.”
Nevertheless, the study demonstrates that this outlook does not negate the slackening of growth in industrial activity during the first part of this year.
For Castelo Branco, this tendency is even more evident when one examines changes in real sales, which fell in the third and fourth quarters of 2004, and preliminary data for the first quarter of 2005, which suggest that the decline continues.
Real sales in manufacturing rose 2.85% in February in relation to January. When compared with 2004, sales were up 5.86%. Castelo Branco cautioned, however, that these figures do not reflect a recovery in industrial activity, in view of January’s substantial 3.20% decline.
He said that the drop in industrial sales and the flattening of industrial activity are the result of the hikes in interest rates since last September.
Translation: David Silberstein