São Paulo – The recessive environment of the global economy has generated doubts among Brazilian industries in decisions regarding greater investment. However, investment should continue growing, but at a lower rate, as shown in the Industrial Investment Analysis, published yesterday (16) by the Brazilian Economics Institute (Ibre) at Getúlio Vargas Foundation (FGV).
The study took place between April 15th and May 29th this year. A total of 820 companies were addressed in 24 states, with joint revenues of 451 billion reals (US$ 225 billion) and participation of 23.6% in Brazilian exports. Half of them pointed at uncertainties with regard to demand as the main bottleneck to greater investment. This universe is the highest in the historic series since 2004, as shown in a press statement by the FGV.
When inquired whether they faced investment difficulties, 87% of the companies answered that they did, double the total in the same period last year (43%). In the questionnaire about the main reason for investment, most (36%) showed plans of expanding productive efficiency. This was the highest proportion since 2002 (43%).
With regard to investment programs, 26% of the industries approached said that they did not plan to do so – the highest level registered in the research since 2003 (28%). Whereas 24% showed the intention of increasing their production capacity, despite just 14% having announced targets for modernisation of their industrial parks through the replacement of machinery.
Apart from the fear of lower orders, businessmen pointed out the lack of resources as a factor for limitation of investment, mentioned by 35% of those inquired. Then come companies that are complaining about the weight of taxes (29%). But this level shows that the cost is not that relevant in investment decisions, as the percentage is the lowest recorded in the study.
The explanation is the tax breaks granted to some sectors, like the auto industry, with lower Industrialized Product Tax (IPI), as shown by the study coordinator, Aloiso Campelo. The economist said that, for the first time, the research shows evolution of investment, following the same model adopted by the European Community.
"Forecasts are optimistic," said Campelo. That is because, despite the uncertainty, industries plan to continue increasing investment by 7.8%, an average among all those researched. The growth should however, be more modest than in 2008, when there was expansion of 16% over 2007. But there was a reduction in the rhythm as a whole: civil construction should invest 9.7%, against 13.5% in the previous period, the consumer goods sector, 9.1%, against 16.4%, the capital goods sector, 8.1%, against 21.4%, and intermediary goods, 5.7%, as opposed to 16.1%.
According to the economist, in previous crisis cycles, the domestic economy was more affected whereas, now, the effects are more concentrated on other countries. The fact is that Brazilian industry exports to markets that have wilted. In a total of six factors pointed out as inhibitors to investment, access to credit comes in fifth place, pointed out by 28% of those interviewed, the same percentage as the number of companies who also mentioned the cost of financing.
*Translated by Mark Ament
