Brazil Industry Grows Slowly Due to Strong Brazilian Currency

A Brazilian worker A monthly study by the Federation of Industries of the State of São Paulo (Fiesp) and by the Center of Industries of the State of São Paulo (Ciesp), considering seasonal changes – a procedure that permits elimination of oscillations characteristic of certain periods – reveals that the level of industrial activity in the state of São Paulo in August was 0.0% (stability).

Without the seasonal modification, the Level of Activity Index was 4.5%. In the year to date, the industry of the state of São Paulo accumulates growth of 4.9%.

To Antonio Correa de Lacerda, director of the Ciesp economic department, the result shows slight improvement, but the industrial sector is still losing opportunities.

"Industry is still growing around 5%, but is not, for example, accompanying the growth of trade, 9%. It is not due to lack of competitiveness, but to the unfavorable environment due to the appreciation of the Brazilian currency, the real, which is favoring imports."

According to Paulo Francini, director of the Research and Economic Studies Department (Depecon) at the Fiesp, transformation industry is growing fast. "The result is good when compared to last year and industry has been showing that there is space in its productive capacity."

The textile sector Level of Activity Index presented growth in August. When compared to July, the result considering the seasonal adjustment was 0.6%. When comparing the first eight months of this year to the first eight months of last year, the variation was 4.6%.

In the chemical, petrochemical and pharmaceutical sector, the variation in August was 1%. Between January and August 2007, in comparison with the same eight months last year, the sector grew 6.7%.

The negative performance in the month of August was for the vehicle sector, which registered a reduction of 6.9%. In 2007, from January to August, the result has also been negative (a 1.1% drop) when compared to the same period in 2006.

CNI

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