Fixed Capital Investment Indicator Grows 1.3 Percent in May, Says Ipea
RIO DE JANEIRO, BRAZIL – The data were released on July 4th, by the governmental Institute of Applied Economic Research (Ipea), and show how much companies have invested and increased their capital assets.
The IPEA indicator is one of the demand side components of the Gross Domestic Product (GDP, the sum of all goods and services produced in the country) and, according to the Institute, its growth points to an increase in the productive capacity of companies, reflecting the improvement of entrepreneurial confidence in business.
Investment also accelerated in the twelve months period that ended in May, rising from 2.7 percent in April to 4.2 percent in May. In 2019 to date, the indicator rose three percent. When compared to May last year, the index registered a growth of 13.9 percent, partially influenced by the effects of the truckers’ strike in 2018, which generated a lower comparison basis.
Sectors
The indicator computes investments in machinery and equipment, construction and other fixed assets (such as research and development, intellectual property, permanent crops, and breeding cattle). Only construction presented a negative performance in May, with a 0.8 percent drop in relation to April.
Apparent machine and equipment consumption (“Came”) grew 3.9 percent in May of this year. Among Came’s components, the emphasis is on capital goods imports, which grew 16.1 percent (offsetting the 11.6 percent drop in April). Domestic production increased by two percent. The other fixed assets segment increased 0.6 percent in the period, contributing to the investments’ positive result, according to Ipea.
Compared to May 2018, the three capital goods categories performed well, influenced in part by the adverse effects of the truckers’ strike in May last year. The main emphasis was on Came, which grew 23.7 percent in relation to May 2018. Construction, on the other hand, registered a year-on-year increase of 8.7 percent and other fixed assets rose 6.4 percent in relation to May 2018.
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