Brasília – Brazilian industry needs to cut down its inventories to go back to growth, said the National Federation of Industry (CNI) research manager Renato da Fonseca said this Thursday (27th). According to him, the industry expects high consumption due to year-end shopping to contribute to lower the stock-up levels.
This Thursday, the CNI revised its former forecast of 1.6% industry growth in 2012. The organization believes the sector will remain stagnant. In the specific case of the processing industry, the CNI calculates that production will be down 1.9%. The figures were released in the third quarter Conjuncture Report.
“There are signs of recovery. The August edition of the Industrial Survey shows an increase in production, but it will not suffice to make up for the losses incurred thus far. We have high stock-up and growth is dependent on adjusting these inventories,” said Fonseca.
He said the cost-cutting measures targeting the industry which the government has announced, such as lower electricity bills and payroll tax breaks, are key to resuming growth.
“The consumption stimulus measures have succeeded in countering the crisis in 2008 and 2009, but do not promote sustained growth, hence the importance of lowering the cost and increasing the competitiveness of our industry. It is important for the government to keep working on that front,” he said. The actual results of these government actions will only be felt starting in 2013.
*Translated by Gabriel Pomerancblum
