São Paulo – Capital goods exports from Brazil were down 23% year-on-year in April, the Brazilian Machinery and Equipment Industry Association (Abimaq) reported this Wednesday (27th). Exports also declined in the four-month period through April, though by a smaller rate of 15.6%.
In April, capital goods export revenues reached US$ 614 million. In the four months through April, exports fetched US$ 2.6 billion. “This proves that the exchange rate has yet to reach competitive levels, and the scenario is made even worse by the paralysis in export financing,” Abimaq said in a statement.
Year-to-date, agricultural machinery exports dropped the most at 29.4%, followed by logistics and civil construction machinery exports, down 21.8%. Processing industry machinery exports declined 17.4% and oil industry and renewable energy machinery exports were down 17.1%. Foreign sales dropped 13.6% for consumer goods manufacturing machinery and 11.7% for capital goods industry machinery. Exports increased only for infrastructure and heavy industry equipment, by 5.5%.
The leading destinations of Brazilian capital goods exports were Latin America, United States and Europe. Foreign sales were down 7.9% to US$ 1.1 billion to Latin America, down 6.8% to US$ 543,000 to the United States and down 20.4% to US$ 512,000 to Europe.
Year-to-date through April, imports also declined by 16.6% to US$ 7.1 billion, and by 17% year-on-year in April, to US$ 1.8 billion. The industry had a US$ 1.2 billion trade deficit in April and a US$ 4.4 billion deficit year-to-date.
Machinery industry revenues were up 4.5% in four months, despite a monthly decline of 6.2%. Revenues stood at R$ 31.3 billion (US$ 9.9 billion) year-to-date and at R$ 7.5 billion (US$ 2.4 billion) in April. Material released by Abimaq reports that the effect of the current exchange rate is keeping revenues “apparently stable.”
However, the organization’s future outlook is not optimistic. “However, the slowdown seen over the past two months in domestic sales and exports measured in US dollars leads us to forecast a reduction of mechanical capital goods industry revenues in 2015 for the third consecutive year,” Abimaq stated.
*Translated by Gabriel Pomerancblum
