07/31/2008 15h26
Industry grows 3% in June and Fiesp reviews projections
Valor Econômico 07/31/2008
The strong expansion of the São Paulo industry in June, 3.1% after adjustments, led the Federation of Industries of the State of São Paulo (Fiesp) to raise the growth forecast of the Index of the Level of Activity (INA) in one percent, up to 6.5% in 2008. Taking into consideration the data without the seasonal adjustment, the increase was 1.9% compared to May. It was the most significant variation for June in the series since its beginning in 2002. The increase in the first half of this year, 8.8%, was also the greatest for such period since 2004, when the index pointed to an increase of 11.4%. Last month, Fiesp reported a fall of 2.7% in the activity from April to May this year, which led the Department of Economic Research (Depecon) of Fiesp to the conclusion that the industry of São Paulo had started a deceleration process and the index would end the year at a growth rate of 5.5%, below the 6.3% seen last year. "The result from June surprised us and gave rise to doubts - positive ones, though - regarding our previous evaluation", says Paubo Francini, director of the Depecon of Fiesp. The result was mainly influenced by the increase of real sales, 8.4% compared to May. Compared to June last year the increase reached 12%. Although the figures show a strong growth rhythm for the sector, Fiesp continues betting on a "settling down" of the activity at more modest levels. According to Francini, the high level of inflation, the increase in the basic interest rate and the foreign exchange valuation must affect the industry at some point. There may be signs of cooling down already in the third quarter, a period that traditionally uses to be heated in the productive sector. The Level of Use of the Installed Capacity of the most representative sectors of the São Paulo industry remains high, and that caused the aggregate index to a level of 83.7%, well above the level of 82.8%, from June, 2007. To Francini, the index continues compatible with the level of activity and is not concerned in relation to inflation.
