Still far away from the crisis, industrial sector sees growth
Folha de S. Paulo - 01/30/2008
A survey carried out by the CNI (National Confederation of the Industry) with 1,400 companies identified that the industrial sector foresees expansion of the production, greater use of the installed capacity, and increase of revenue, employment and acquisition of raw materials for the next six months. The survey was carried out between the 2nd and the 22nd of this month before the turbulence period in the international financial market. Although the survey does not show the business people's perception after the worsening of the external environment, the CNI maintains the indication of a favorable internal setting, with growth estimate of 5% for the Brazilian GDP (Gross Domestic Product) and 5% for the industrial activity. The evaluation, according to the head economist of the entity Flávio Castelo Branco, is that the businesses environment will continue dynamic and that the warmed internal demand will compensate a possible loss of pace in the foreign market. "Brazil is in a different situation. In other crises, the reserves were low and the foreign debt was high, the exchange rate was fixed, and the interest rates were high. Now, the past is not valid anymore. We do not expect that the international instability will contaminate the Brazilian economy in the short term, says Castelo Branco. That optimistic analysis is, however, restricted to the first semester, which tends to remain warmed with the greatest consumption. In case there is deterioration of the world economy, the country can begin to feel the effects starting in the second semester. In spite of the favorable indications for the industrial activity, the private investments may be affected. The indication is that the decisions of expansion of factories and purchases of machines consider broader horizons and, if there is distrust as for the capacity of the internal demand continuing warmed in face of a world slowing down, industrialists may postpone their investment decisions. Up until now, the instability of the Stock Market is still a reality that is distant from the factories. After sound sales in the end of 2007, the industries have begun 2008 with low stocks.