Sales in Brazil Fall for the 4th Month in a Row

Brazil’s National Industrial Confederation (CNI) reports that there was a drop of 0.91% in sales by the industrial sector in October, compared to September.

That was the fourth consecutive month sales have fallen. Compared to October 2004, sales in October 2005 were down 2.51%.

The CNI says the main reasons for the weak performance are large inventories and the exchange rate with a strong real that has cut into exporter profits.

At the same time, industrial salaries in Brazil rose 0.89% in October in comparison with September. After adjustment for seasonal factors, which discount typical monthly variations, the increase came to 0.53%.

Data released yesterday, December 6,  by the CNI show that this index has been on the upswing since March, with a cumulative increase of 5.4% through October.

CNI technical personnel judge that the salary improvement can’t be a reflection of positive sales results, since sales dropped 0.91% in October in relation to September. The impelling factor was the stability in price indices.

The study also shows that the rate of capacity utilization (the percentage of factories’ installed capacity that is actually being used) grew from 81.2% in September to 81.8% in October.

The CNI points out, however, that, in October, industries customarily maintain a "high degree" of capacity utilization, due to increased activity to meet year-end demand.

The quantity of hours worked rose 0.30% in October, in contrast to the 0.44% decrease registered in September. Nevertheless, employment levels have remained stable since August.

When October is compared with October, 2004, the total of industrial workers is up 1.80%, less, however, than in the year-to-year comparisons for September (2.24%) and August (3.05%).

Agência Brasil

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