Production continued high in the quarter
Valor Econômico - 04/02/2008
As a whole, the Brazilian industry kept, in March, the strong production rhythm that marked the first two months of the year. Some companies, however, have started noticing some signals of accommodation of the growth rhythm and the unbalance among the sectors is more evident. For the automotive chain, the growth figures surpass two digits in comparison with 2007's first quarter - the automobile manufacturers produced nearly 30% more in the accumulated from January to March compared to last year's same period. In the segment of semi-durable consumption goods, the reports are less uniform, but always positive. Textile and shoe industries reported sales 10% bigger, on the average. In this setting, pressures for price readjustments grow due to the increase of the inputs' prices, and it is expected that it affects exactly the most dynamic sectors. After the readjustment of 78% of the iron ore, coal must go up about 200% this week, raising the cost of the steel, the basic input for automobiles, machinery, and civil construction - which stimulates the current growth of the Brazilian economy. The entrepreneurs argue that it is an inflation of costs, caused by the high of commodities prices, and they stress that the industry can meet the demand. "It is not worth increasing interest rates in order to lower the price of the steel", says president of the Rio Negro distributor, Carlos Loureiro, about the perspective of the Central Bank's raising the interest rates. He says that the sales of steel from the plants to distributors increased 20% in the first quarter of this year compared to last year's same period. From distributors to clients, the increase in the sales reached 25%. Part of the increase is a result of the anticipation of sales by the companies, which expected an increase of 10% in the price of the steel that occurred around the 20th last month. In the second quarter of this year, the percentage of the increase in the sales of steel must fall to a little less than 10%, but it does not mean sales deceleration. It happens that the comparison basis is stronger, because the heating of the market started in the second quarter of 2007. In 2008, the official estimate of the sector is of a 10% high for the sales of plain steel, but Loureiro believes that it can reach 12% or 13%."There is no sign of cool down", he says.