CAPITAL GOODS: HIGH OF IMPORTS PRESSING THE RESULT OF SEGMENT YEAR

CAPITAL GOODS: HIGH OF IMPORTS PRESSING THE RESULT OF SEGMENT YEAR

With the increase in the participation of imported goods in the apparent consumption of mechanical capital goods, the sector should end the year with a drop in sales, even though physical production has grown in recent months. This mismatch is explained by the reduction in margins, which manufacturers were forced to practice, says the Brazilian Association of Machinery and Equipment Industry (Abimaq).

“Manufacturers could not pass on the inflation index to prices due to fierce competition with imports”, said on Wednesday the secretary director of Abimaq, Carlos Pastoriza. According to the entity, the balance of production in the year to date shows an upward trend around 5% about 2012, although, in the same period, the sector's revenue fell 5%, for about BRL 66 billion. Abimaq's projection is that the machinery industry will close 2013 with a fall between 4% e 5% compared to last year, which has already been a difficult year.

Pastoriza emphasizes that the financing of the National Bank for Economic and Social Development (BNDES) for capital goods, o PSI Finame, avoided an even greater drop in sales in 2013. “PSI was the oxygen that kept machine makers this year”, it says. To 2014, the entity expects the government to maintain the special financing conditions so that the year is better than 2013.

Abimaq also highlights that the exchange rate factor can help the sector a little more, mainly in the short term. According to Pastoriza, the dollar “ideal” is around R$ 2,60. “This amount could give our associates some breath.”, says the director.

from january to october, the apparent consumption of machines totaled R$ 102,4 billion, increase of 6,9% in relation to the same period of 2012. Exports, on the other hand, fell 11,9% on the same basis of comparison, for US$ 10,1 billion. And as imports totaled US$ 27,2 billion in the year, which means an advance of 6,9%, the sector's trade deficit expanded by 22,3% from january to october, for US$ 17,133 billion.

Also according to Abimaq, the level of utilization of the installed capacity (NUTS) of the sector has remained at an average of around 75,1%, performance well below the desired.

(Source: Trade and Industry Journal)