Production, employment on the rise in Brazilian industry

October was the fifth consecutive month with a spike in production

Published in 19/11/2020 - 15:00 By Pedro Peduzzi - Brasília

Brazil’s industrial output had the fifth consecutive month on the rise in October, with 58.3 points, according to the Industrial Survey for October, published today (Nov. 19) by the National Confederation of Industry (CNI). In the previous month, the index was slightly higher (59.1 points).

The index gauging the number of employed workers stood at 54.9 points—the third month on the row with an increase. Values above 50 are said to indicate increase in production and employment compared to the previous month. With levels below 50, a reduction is reported.

The CNI survey found that the average utilization of the installed capacity stood at 74 percent in October, on the increase for the sixth consecutive month. In September, the rate was 72 percent. “The Survey also reveals that the installed capacity utilization was higher than usual for the month of October, as the effective rate compared to usual levels was above the 50 point threshold by hitting 51.1 points,” CNI declared.

Also according to the confederation, stocks continue on the wane and below the levels desired by the industry, despite the streak of spikes in production. “While the indicator of stock levels marked 45.5 points, effective stocks stood at 43.4 points, both below 50,” CNI pointed out. Low stocks indicate the need for continuing at stronger production levels.

Projections

Concerning expectations for the coming six months, the survey indicates that investors are optimistic in November, but at a level slightly below October. This reduction is reported to come as a result of an accommodation following the “quick recovery from the effects of the pandemic.”

“Indices are still running high, not just compared to the dividing line, but also to historical averages,” the study notes. The index with expectations for the demand sank 1.8 points to 59.8 in November.

As for the purchase of raw materials, reduction was two points, and the rate was observed at 48 points for this month. The rate for the number of employed workers was down 0.9 points to 53.5 points; exports went down 0.9 to 53.9 points.

According to CNI, the increased optimism “is reflected on the business people’s interest in investing.” In this case, the index was 59.3 points in November (2.1 points higher than in October).

The survey heard 1,870 companies from November 3 through 12. Of these, 738 are small, 647 are medium, and 485 are large plants.

Translation: Fabrício Ferreira -  Edition: Maria Claudia

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