Investment continues strong in the 1st quarter
Valor Econômico - 05/20/2008
Investments continued strong in the first quarter, reflecting the strong growth of the consumption of machinery and equipment and the production of inputs typical of the civil construction. The analysts' forecasts point to an expansion of up to 18.5% compared to the same period of last year. For 2008, the bet is that the Gross Fixed Capital Formation (GFCF, which measures what is invested in civil construction and machinery and equipment) will grow between 11% and 14% regardless of a scenario marked by the increase in interest rates. The figures of the FBCF show that the Brazilian companies keep on investing in the increase and modernization of the productive capacity, which is important to diminish the inflationary risks, even though they themselves do not eliminate such risks, say the analysts from Bradesco. The estimates for the expansion of investments made by the Department of Researches and Economic Studies of Bradesco are quite positive. For the apparent consumption of machinery and equipment (sum of production and importation, excluding exportation), Bradesco's analysts bet on an increase of 21.8% from January to March, which is a growth little above the 21.6% from 2007's fourth quarter. With the appreciation of the exchange rate, the companies continue taking advantage of the reduction in price of the capital goods to import machinery, highlights economist Fernando Rocha, of JGP Gestão de Recursos. In the first quarter, the external purchases of these goods increased 34%, little below the 35.7% of last year's last three months. The production of capital goods, on its turn, grew 17.1%, below the 24% of 2007's fourth quarter. "It is a normal deceleration, since the base for comparison begins getting bigger", say Bradesco's analysts. Notwithstanding the weaker production, the apparent consumption of machinery and equipment continued steady because, in addition to the robust increase in importation, there was a significant deceleration of the rhythm of exportation. As reminds the economics department of the bank, external sales are entered with a negative sign in the calculation of the index. The external purchases went 6.8% up in the first quarter, much less than the 17.2% from last year's last three months.