Favorable Expectations Make Brazil’s Machinery Sector Grow 16%

Machinery in Brazilian farm Brazil's capital goods industry grew 16% in the first two months of this year when compared to the same period last year. This was the best performance since the first two months of 2001, when the increase was almost 20%.

According to the head of Industrial Analysis at the IBGE (Brazilian Institute of Geography and Statistics), Silvio Sales, the result for the sector, which is responsible for the production of machinery and equipment used in the production of other goods, is well above the average presented for other industrial sectors.

Intermediary goods (industrial raw material), for example, grew 3.3% in the period. Production of durable and non-durable consumer goods (turned to end-users) grew respectively 0.7% and 1.7%.

"There are favorable expectations in companies that are buying machinery and equipment and this creates stronger and expanded production capacity to supply a possible future increase in demand. You only decide to increase your orders of machinery and equipment if your expectations are favorable for future market demand," stated Sales.

The demand for capital goods was greater in industry, as machinery and equipment turned to this segment of the economy posted an increase of 15.8% in production. Energy and agriculture also demand this type of capital goods, permitting an increase of 14.5% and 12.4%, respectively.

As a whole, Brazilian industrial production grew 0.3% in February when compared to the month of January. The two first months of 2007 registered an increase of 3.8% when compared to 2006.

In the comparison with February 2006, industrial production in February this year rose 3%. In the accumulated result for 12 months, from March 2006 to February 2007, the variation was 2.8% as against the previous 12 months period, March 2005 to February 2006.



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