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Brazil Gearing Up for 2005

The Brazilian industries plan to invest more in 2005. According to a research disclosed October 26 by the National Confederation of Industries (CNI), 94% of the large companies and 82% of the small and medium sized companies have the intention of investing in the following year.

The research was carried out in the third quarter of the year with 1,224 companies in the whole country. In the study carried out in 2003, the percentages of companies with the intention of investing in 2004 were, respectively, of 86% and 80%.


According to the research, 62% of the large companies and 57% of the small and medium sized companies signalled they have the intention of investing to increase production.


In second and third place in the priorities list are improving the quality of the products and launching new products.


The research shows that the investments will be made, preferably, to meet the increase in demand in the domestic market.


However, 40% of the large companies and 20% of the small and medium companies indicated their intentions of investing to meet both internal and external markets.


Furthermore, 20% of the large and 10% of the small and medium companies declared they wish to invest exclusively, or preferably, to meet external demands.


Although 80% of the companies informed their current production capacity is adequate to meet the estimated demand for 2005, the perspectives of inadequacy to produce more increased.


According to CNI, 18.6% of the large and 21.6% of the small and medium companies declared to have inadequate capacity to meet the demands in 2005.


In the previous year research the percentages were, respectively, of 10.9% and 18%.


The segments in greater need of investment to overcome such deficiency, according to CNI, are the iron works, transport materials, leathers and furs and pharmaceutical products.


At the other end, the sectors showing greatest production capacity adequacy index are plastic materials, clothing and shoes, and paper and cardboard.


The purchase of machinery and equipment was pointed out as the main investment item in 2005. According to the study, 40% of the companies declared their intentions of investing in capital assets, as opposed to 30% in the research carried out in 2003.


ANBA ”“ Brazil-Arab News Agency

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