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Brazilian Industry Unhappy with Little Domestic Demand

The industrial activity registered in Brazil in April continued the upward trend initiated in January. This finding is part of the 159th Survey of Manufacturing Industry, published Thursday, April 27, by the Getúlio Vargas Foundation’s Brazilian Economic Institute (IBRE/FGV).

The data reveal that industry is more satisfied with the current business situation, mainly in consequence of the recovery of demand levels and the adjustment of inventory levels.

Between January and April, the percentage of industries that considered the business situation to be good jumped from 16% to 27%, while the percentage that regarded it as weak remained unchanged at 20%.

The seven percentage point difference between the two extreme ratings is the largest since January, 2005. The level of demand was classified as strong by 18% of the industries, and weak, by 16%.

This two percentage point positive difference between the strong and weak classifications represents an improvement in relation to the one percentage point negative difference registered during the same period last year and the four percentage point average negative difference in April over the past ten years.

23% of the companies included in the survey identified demand as the factor that is limiting the short-term expansion of production. This is the smallest percentage since April, 2005, when it was 19%. In January, 29% of the industries considered demand to be the restraining factor.

Despite the upswing in productive activity, average capacity utilization in manufacturing industries suffered a slight decline. Taking into account seasonal factors, the level was 83.5%, compared with 84.4% in January.

Agência Brasil

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  • Guest

    cost of capital in brazil is an extortion. everything is so expensive, due to the cost of capital, high taxes, burecracy. so if internal demand is limited due to this facts and others , now with the real so strong wouldn’t brazilian exporters going to face difficulties in the near future?

  • Guest

    ????
    How can there be demand when the average lending rate on banks loans is 59 % in Brazil while the inflation is 4,5 % and the average borrowing rate from the government is at slightly higher than 10,5 % as per Meireles ???????

    How can their be demand when Brazilian Banks are taking such rates that makes the price of goods bought in credit twice the price, with the consent and agreement of the government ?????

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