Industrial Production Struggles to Recover from Recession in Brazil

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Brazilian industry production fell again in April after slightly recovering in March according to the National Confederation of Industry (CNI). A CNI survey released on Wednesday shows that both production evolution and utilization of installed capacity were below fifty points, revealing a decrease.

“The Industrial Survey indicates that the industry still faces difficulties to overcome the economic recession faced by the country,” says the CNI’s Industrial Survey, adding, “The data generally represent a reversal of the positive data of March.”

According to the survey the indicator which measures production evolution fell to 41.6 points, while the utilization of installed capacity decreased to 36.6 points.

The search indicators range from zero to 100 points with indicators below fifty points showing declines, while those above registering growth.

CNI analysts say that although the study highlights that holidays are responsible for part of the declines registered during the month (April had seventeen working days compared to 23 days in March) the decline in 2017 was ‘more intense than usual’.

According to the CNI, the weaker performance has reduced business optimism and the forecast by the entity is of more layoffs in the industry. “Without great prospects for improvement in the economic scenario, entrepreneurs remain unwilling to invest,” says the Confederation.

The investment intention index for the next six months stood at 46.6 points in May, down by 0.4 points from April. According to the survey, despite an increase of 7.2 points compared to last year, the intentions to invest continue low.