Industry starts 2008 with stocks at low levels

Folha de S. Paulo - 12/19/2007

The CNI (National Confederation of the Industry) foresees that the industries will start 2008 with the stocks at the lowest level since January/2005. Due to the risk of lack of products, the tendency is that the companies start next year at a fast pace in order to replace the offer of goods. In order to cater to the commerce, which this Christmas offers low interest rates and longer payment periods compared to previous years, segments such as those of the automobile, food and furniture manufacturing chains operate in three shifts and are likely to call off the blanket vacations. Making a balance of the industrial sector, CNI's president emphasized that the expected greater growth is for the last quarter of this year and that this effect will make the plants start 2008 at a fast pace. As the entity projects a 5.6% expansion of the economy and an increase of 6.1% in the production for this last quarter, the evaluation is that 2008 will start with a minimum growth of 3.5% for the industrial activity. Despite this optimist forecast, the tendency is that the rhythm loses its vigor in the following months due to the lower profitability obtained from exportation and to some weakening of the consumer's borrowing capacity. While the CNI expects an expansion of 5.3% for the industry in general (5.8% for the processing industry) for this year, for 2008 the estimate is 5%. The industry is getting ready for the fifth consecutive year of expansion, with plans to increase the investments in the installed capacity and the desire that the domestic market remains heated.

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