Industry to invest with an eye on the domestic market in 2008
Valor Econômico - 11/22/2007
Only 5% of the 1,655 companies heard by the National Confederation of the Industry (CNI) will prioritize investments aimed at the foreign market next year. The focus is on the domestic demand. Besides the unfavorable exchange rate, another major problem the research reveals is the high financial cost of the projects, which forces 71% of the industries to use their own resources. That difficulty, despite the recent declining path of the interest rates, has remained the same since 2001. The study of the entity confirmed that the investment of funds for exportation has been dropping since 2004. Yesterday, CNI economists Flávio Castello Branco and Paulo Mol released the figures of the Special Survey on investments and alerted to the problem that the small companies are the ones that most need to invest, but, on the other hand, are the ones with greatest difficulties to get loans. CNI information also revealed that private commercial banks have granted more credit to industries than the development banks and the public financial institutions in 2007. The survey showed that 42% of the industries intend to invest on the purchase of machinery and equipment, mainly to increase production and cater to the greater domestic demand in 2008. On the average, 20% of the companies of the sector declared to CNI that their capacity is below the expected demand for next year. The situation of the large industries is not as tough. 86% of them declared that they are adjusted to the next year's expected demand. Among the small companies, 22% of them have their capacity below the demanded level. The four sectors with the greatest records of small adequacy in relation to the expected demand for 2008 are: alcohol, machinery/equipment, other transportation equipment (except automotive vehicles), and non-metallic minerals. In this group, at least 25% of the industries have their capacity below the necessary for 2008. In 2007, six sectors had large participation in the investments: alcohol, beverages, metallurgy, electric materials, automotive vehicles, and machinery/equipment. On the other end, the main frustrations took place in the segments of furniture, leather, footwear, timber, and rubber. This year's scenario, also revealed by the survey, shows that 86% of the industries had planned to invest and that 85% of such investments have been made, even if only partially.