April Was Among Worst In Brazilian History For Industry, According to CNI

RIO DE JANEIRO, BRAZIL – The month of April was the worst in history for the industry, according to the Industrial Indicators survey released on Tuesday, June 9th, by the National Confederation of Industry (CNI). When compared to March, all the study’s indexes in April recorded “unprecedented drops, the sharpest of their respective series”.

In April, the sector’s real turnover slipped 23.3 percent, hours worked in production fell 19.4 percent, and employment contracted 2.3 percent.

In addition, Installed Capacity Utilization (UCI) fell 6.6 percentage points in April compared to March, to 69.6 percent, representing the largest idleness in production in the series started in 2003.

For the CNI, the April result is a picture of the damage caused to the industry by the intense and lasting reduction in demand due to the crisis triggered by the novel coronavirus pandemic.

“April was the peak of the crisis, as we had social isolation measures in most large cities throughout the month. We expect the economy to start to rebound in June, although it is possible that the scenario will show a slight improvement in May, with the reduction of restrictions at the end of the month,” says Renato da Fonseca, executive manager of Economics at CNI.

The study also shows that, in addition to sales, employment and hours worked, both the wages cost and workers’ average income also dropped in April, by 9.5 and 6.5 percent, respectively. “The record declines reflect the worsening crisis on industrial activity. The drop in demand was even more intense than in the preceding month, since social isolation was in place throughout the month, unlike in March, when the measures were hardened in the second fortnight,” the survey said.

On April’s sales, which dropped 23.3 percent compared to March in the series free of seasonal influences, the CNI points out that this is the sharpest decline since the start of the historical series in 2003. “This is the second month followed by a drop in sales, which accumulated a 26.6 percent drop in March and April. In the series without seasonal adjustment, the April 2020 sales are the lowest in the series”.

As for employment data, the organization also stresses that the drop was the sharpest in the series. “It is the largest monthly drop in the series and the third in a row. Over the past three months, employment declined by 2.9 percent. Considering the series without seasonal adjustment, industrial employment is the lowest since the start of 2004”.

Source: Estadão Conteúdo