São Paulo industry foresees resumption this month, after Augusts production fall
Valor Econômico
After five months of consecutive increases, the Level of Activity of the processing industry of São Paulo (INA) registered a 0.8% decrease with the seasonal adjustment, a result which was caused by the fall in sales, lesser use of the installed capacity, and reduction of the worked hours in the period. In spite of that, the Federation of the Industries of the State of São Paulo (Fiesp), responsible for the index, assesses there are no reasons to be concerned. Paulo Francini, director of the Department of Economic Research of the entity, says that the low is a "point outside the curve" and that, after this correction, the growth path will be resumed already in September.
Without considering the seasonal adjustment, the INA registered an increase of 2.7%, in a movement consistent with the behavior of the processing industry in other years. "August and October are seasonally the strongest months of the year for the industry", says Francini, explaining that, removing such a seasonal effect, there was a negative variation. "But that is no reason for concerns. We do not believe in a reversion". Compared to August 2008, the INA fell 7.4%. In the period from January to August the reduction of the index reached 12.8%. Also in the period of 12 months ended last month, there was a 9.3% decrease. The bases used for comparison continue being complicated, due to the effects of the international economic crisis that resulted on a brake for the industry.
One of the reasons to keep the optimism, according to Francini, has to do with the expectations revealed by the Sensor, an index that precedes the conditions of the industry, surveyed in the current month with companies all over Brazil. The index ended the second half of September at 57.8 points. Not only is such a level above the pre-crisis level, but it is also the highest of the historical series started in June/2006. In the breakdown of the items, the evaluation on the market has also reached the best mark of the series of the index at 66.7 points.
The same took place with the level of employment. The index registered 55.5 points, the best level since June last year. The variable of sales remained positive ending the month at 59.6 points and the investments registered 58.3 points. Only the stock conditions indicated a negative level (under 50 points), at 47.1 points. That indicates the stocks were above desired.