Brasília – Industrial costs fell 1.1% in quarter two from quarter one this year in Brazil. It was the first time the Industrial Costs indicator eased since Q3 2014, the National Federation of Industry (CNI) reported this Wednesday (14).
The drop was driven by lower costs for working capital and intermediate goods imports. In Q2, the cost of working capital was down 7.7%, with the cost of intermediate goods down 11.2% from Q1, primarily due to the recent hike of Brazil’s real relative to the US dollar.
According to the CNI, even though it had a positive impact on costs, the currency hike damaged Brazilian industry competitiveness both domestically and internationally. “The 12.1% drop in price of finished goods imported was more relevant than the 1.1% drop in industrial costs,” the CNI notes, as a result, foreign goods stand a better chance of competing against Brazilian-made ones on the domestic market.
*Translated by Gabriel Pomerancblum
