Industry continues to face difficulties
CNI Indicators ISSN 1676-0212 • Year 20 • Number 4 • April 2017
INDUSTRIAL SURVEY Industry continues to face difficulties The Industrial Survey for April 2017 indicates that industry is still having a hard time overcoming the economic downturn facing Brazil. In general, the data show a reversal of the positive results seen in March. It is worth noting, however, that the severity of this decline can be at least partially attributed to the large number of holidays in April. There were 18 working days in April 2017, compared to 23 in March. Even though activity usually declines between the months of March and April, the drop recorded
in 2017 was steeper than usual. In addition, the capacity utilization rate is once again below the low April 2016 levels, while actual-usual capacity utilization more than reversed all of previous month’s increase. The outlook for demand, exports and purchases of raw materials over the next six months is still positive, but May showed a small decline in optimism. Entrepreneurs are still expecting jobs to fall during the coming months.
Actual-usual capacity utilization levels Diffusion index (0-100)*
Above the usual
50
Below the usual
42.0
41.2
36.6 35.6
APR 2014
JUL
OCT
JAN 2015
APR
34.7
JUL
OCT
JAN 2016
APR
* Figures below 50 points indicate a lower-than-usual capacity utilization for the month.
1
JUL
OCT
JAN 2017
APR
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
PERFORMANCE OF INDUSTRY IN APRIL 2017
Production and employment fall again Industrial production edged down in April, with the production index standing once again below the 50-point dividing line at 44.4 points. It is common for production to drop between March and April, but the decline in 2017 was more pronounced than
usual, also influenced by the successive holidays in April. In April, the index of number of employees also stood below the 50-point mark at 47.0 points, indicating a month-over-month drop in jobs.
Production in April (2010-2017) Diffusion index (0-100 points)
52.8 Increase 50
50.7
Decrease 47.3
47.2 45.3
42.4 41.6 39.7
2010
2011
2012
2013
Production
2014
2015
2016
2017
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
Industrial activity drops in April In April 2017, industrial activity dropped as compared to the same month last year, when it had already shown exceptionally weak results. Between March and April, capacity utilization dropped from 65% to 63%, as a result of which the capacity utilization rate for April 2017 hit its lowest level for the month since the monthly historical series began to be conducted in 2011. It should be stressed that capacity utilization had been showing yearon-year increases since December 2016. The indicator of actual-usual capacity utilization remains below 50 points, indicating low industrial
2
activity levels. After posting the highest monthly increase since April 2010 last month, the index dropped by 4.6 points - the highest decline since June 2014 - to 36.6 points. The low activity levels in April can be at least partly explained by the successive holidays in that month. LARGE COMPANIES - The capacity utilization rate for large companies fell by 3 percentage points between March and April and is 2 percentage points shy of the figure recorded in 2016.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Average capacity utilization rate Percentage*
76 74 72
2011
70
2012 2013
68
2014
66
2015
64
2016
63% Apr/17
62
JAN
FEB
MAR
APR
2017
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Inventory remains at adjusted levels Inventory levels increased slightly between March and April, remaining adjusted to the levels planned by most companies. The inventory index amounted to 50.9 points, while the index of actual-planned inventory levels stood close to the 50-point dividing mark at 50.4 points.
LARGE COMPANIES - The inventory index for large companies reached 52.4 points, denoting an increase in inventory levels. The index of actualplanned inventory levels hit the mark of 52.9 points, indicating excess inventories.
Inventory levels and actual-planned inventory levels Diffusion index (0-100 points)
Increase/ above planned level 50.8 49.8
50
50.6 49.9
49.6 50.4
49.1
49.8
Decrease/ under planned level
48.9
50.3
49.9 49.7
49.4
49.3 48.9
50.1
50.9 50.4
49.2
48.9
48.3
49.1
49.0 48.6
47.8
46.5 APR 2016
MAY
JUN
JUL
AUG
SEP
Evolution
OCT
NOV
Dividing line
DEC
JAN 2017
FEB
Actual-planned
* Figures above 50 points indicate an increase in inventory levels or that actual inventory is above planned levels.
3
MAR
APR
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
INDUSTRY’S EXPECTATIONS IN APRIL 2017
Slowdown in entrepreneurs’ expectations The indices of expected demand, exports and purchases of raw materials are above the 50-point mark, indicating optimism among industrial entrepreneurs. Compared with the previous month, however, all expectation indices are down: demand (-1.4 points to 54.8 points), exports (-0.8 points to
53.2 points) and purchases of raw materials (-1.1 points to 52.6 points). The index of expected number of employees is the only one to show an anticipated drop in coming months. The index reached 48.7 points, holding virtually steady as compared to April.
Expectations indices Diffusion indexes (0-100 points)
Demand
Purchases of inputs and raw materials 56.2
Increase
Increase
54.7
53.7
54.8 50
52.2 52.6
50
51.8
49.1
47.8 Decrease
Decrease
JUL
MAY 2016
SEP
NOV
Expected demand
MAR
JAN 2017
45.7
MAY 2016
MAY
Dividing line
JUL
SEP
NOV
JAN 2017
MAR
Expected purchases of inputs and raw materials
Number of employees
Exports
Increase
Increase
Dividing line
54.0
53.5 50
52.5
50
49.1 48.0
MAY
53.2
50.7
48.7 Decrease
Decrease
45.4 43.6
MAY 2016
JUL
SEP
NOV
Expected number of employees
JAN 2017
MAR
MAY 2016
MAY
Dividing line
JUL
SEP
Expected exports
*The index ranges from 0 to 100. Figures above 50 points indicate an expected increase.
4
NOV
JAN 2017
MAR
Dividing line
MAY
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Investment intentions fluctuating once again The index measuring investment intentions over the next months stood at 46.6 points, representing a 0.4-point decline between April and May. The index has held somewhat steady since February, alternating between small positive and negative fluctuations. Despite the 7.2-point year-over-year increase, investment intentions remain at low levels.
Investment intentions Diffusion indices (0-100 points)
60
55
54.6
50
46.6 45
40
MAY 2014
SEP
JAN 2015
MAY
SEP
JAN 2016
MAY
SEP
JAN 2017
MAY
* The higher the index, the more likely industry is to invest.
RESULTS BY INDUSTRIAL ACTIVITY AND COMPANY SIZE Performance of industry PRODUCTION EVOLUTION
NUMBER OF EMPLOYEES EVOLUTION
CAPACITY UTILIZATION (%)
ACTUAL-USUAL CAPACITY UTILIZATION
INVENTORIES LEVELS EVOLUTION
ACTUAL-PLANNED INVENTORIES
Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17
total
42.4
54.8
41.6
43.3
47.5
47.0
64
65
63
34.7
41.2
36.6
48.9
49.1
50.9
49.1
50.3
50.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
48.1
55.3
44.0
44.2
47.5
45.3
70
70
69
39.1
45.0
39.9
46.8
51.2
51.2
43.2
48.4
49.6
Manufacturing 42.2
54.8
41.6
43.2
47.4
47.1
63
65
63
34.5
41.1
36.5
48.9
48.9
50.8
49.3
50.3
50.3
BY COMPANY SIZE Small1
37.7
49.7
41.7
40.5
45.3
45.4
56
58
57
31.3
39.2
35.3
44.7
48.6
48.4
42.8
45.9
45.5
Medium2
40.9
54.0
41.5
43.0
46.4
46.4
61
63
61
33.2
40.1
35.9
48.3
49.3
50.5
48.6
50.0
50.1
Large3
45.6
57.8
41.7
44.8
49.1
48.2
69
70
67
37.1
42.8
37.7
51.3
49.2
52.4
52.5
52.6
52.9
The indicators vary in the 0-100 interval. Figures above 50 points indicate positive evolution, higher-than-planned inventory levels, or higher-than-usual capacity utilization. 1 - Company with 10 to 49 employees. 2 - Company with 50 to 249 employees. 3 - Company with 250-plus employees.
5
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Industry’s Expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
47.8
56.2
54.8
50.7
54.0
53.2
45.7
53.7
52.6
43.6
49.1
48.7
39.4
47.0
46.6
BY INDUSTRIAL ACTIVITY Mining and quarrying
49.3
52.7
53.3
49.5
54.7
49.2
46.7
49.4
52.4
42.9
47.6
47.4
46.6
51.3
51.1
Manufacturing
47.7
56.3
54.7
50.6
53.9
53.3
45.6
53.9
52.6
43.6
49.1
48.7
39.1
46.9
46.5
BY COMPANY SIZE Small1
45.3
54.4
52.6
47.2
51.6
50.6
43.0
51.3
49.6
41.7
47.0
46.9
27.9
34.0
34.0
Medium2
47.2
55.1
55.6
49.7
54.7
53.7
45.3
53.0
52.8
43.3
48.6
48.7
35.6
43.1
42.2
Large3
49.3
57.7
55.4
52.9
54.8
54.3
47.2
55.3
54.0
44.7
50.5
49.5
47.0
55.4
55.2
The indicators vary in the 0-100 interval. Figures above 50 points indicate positive expectations. * The indicator varies in the 0-100 interval. The higher the index, the more likely industry is to invest. 1 - Company with 10 to 49 employees. 2 - Company with 50 to 249 employees. 3 - Company with 250-plus employees.
i
Learn more
Technical specifications
For more information on the survey, including historical series and methodology, kindly visit: www.cni.org.br/e_sondindustrial
Sample profile: 2,387 enterprises, including 1,015 small, 826 medium and 546 large companies. Data collection period: May 2-12, 2017.
INDUSTRIAL SURVEY | English version of “Sondagem Industrial abril 2017” | Monthly Publication of the National Confederation of Industry - CNI | www.cni.org.br | Policy and Strategy Unit - DIRPE | Economic Policy Unit - PEC| Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Team: Juliana Lucena do Nascimento, Marcelo Souza Azevedo, Roxana Rossy Campos and Taryane Carvalho Perne | CNI Publishing Center | Graphic design supervision: Alisson Costa | Subscriptions: Customer Service - Phone: +55 (61) 3317-9992 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
INDUSTRIAL SURVEY Industry continues to face difficulties The Industrial Survey for April 2017 indicates that industry is still having a hard time overcoming the economic downturn facing Brazil. In general, the data show a reversal of the positive results seen in March. It is worth noting, however, that the severity of this decline can be at least partially attributed to the large number of holidays in April. There were 18 working days in April 2017, compared to 23 in March. Even though activity usually declines between the months of March and April, the drop recorded
in 2017 was steeper than usual. In addition, the capacity utilization rate is once again below the low April 2016 levels, while actual-usual capacity utilization more than reversed all of previous month’s increase. The outlook for demand, exports and purchases of raw materials over the next six months is still positive, but May showed a small decline in optimism. Entrepreneurs are still expecting jobs to fall during the coming months.
Actual-usual capacity utilization levels Diffusion index (0-100)*
Above the usual
50
Below the usual
42.0
41.2
36.6 35.6
APR 2014
JUL
OCT
JAN 2015
APR
34.7
JUL
OCT
JAN 2016
APR
* Figures below 50 points indicate a lower-than-usual capacity utilization for the month.
1
JUL
OCT
JAN 2017
APR
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
PERFORMANCE OF INDUSTRY IN APRIL 2017
Production and employment fall again Industrial production edged down in April, with the production index standing once again below the 50-point dividing line at 44.4 points. It is common for production to drop between March and April, but the decline in 2017 was more pronounced than
usual, also influenced by the successive holidays in April. In April, the index of number of employees also stood below the 50-point mark at 47.0 points, indicating a month-over-month drop in jobs.
Production in April (2010-2017) Diffusion index (0-100 points)
52.8 Increase 50
50.7
Decrease 47.3
47.2 45.3
42.4 41.6 39.7
2010
2011
2012
2013
Production
2014
2015
2016
2017
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
Industrial activity drops in April In April 2017, industrial activity dropped as compared to the same month last year, when it had already shown exceptionally weak results. Between March and April, capacity utilization dropped from 65% to 63%, as a result of which the capacity utilization rate for April 2017 hit its lowest level for the month since the monthly historical series began to be conducted in 2011. It should be stressed that capacity utilization had been showing yearon-year increases since December 2016. The indicator of actual-usual capacity utilization remains below 50 points, indicating low industrial
2
activity levels. After posting the highest monthly increase since April 2010 last month, the index dropped by 4.6 points - the highest decline since June 2014 - to 36.6 points. The low activity levels in April can be at least partly explained by the successive holidays in that month. LARGE COMPANIES - The capacity utilization rate for large companies fell by 3 percentage points between March and April and is 2 percentage points shy of the figure recorded in 2016.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Average capacity utilization rate Percentage*
76 74 72
2011
70
2012 2013
68
2014
66
2015
64
2016
63% Apr/17
62
JAN
FEB
MAR
APR
2017
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Inventory remains at adjusted levels Inventory levels increased slightly between March and April, remaining adjusted to the levels planned by most companies. The inventory index amounted to 50.9 points, while the index of actual-planned inventory levels stood close to the 50-point dividing mark at 50.4 points.
LARGE COMPANIES - The inventory index for large companies reached 52.4 points, denoting an increase in inventory levels. The index of actualplanned inventory levels hit the mark of 52.9 points, indicating excess inventories.
Inventory levels and actual-planned inventory levels Diffusion index (0-100 points)
Increase/ above planned level 50.8 49.8
50
50.6 49.9
49.6 50.4
49.1
49.8
Decrease/ under planned level
48.9
50.3
49.9 49.7
49.4
49.3 48.9
50.1
50.9 50.4
49.2
48.9
48.3
49.1
49.0 48.6
47.8
46.5 APR 2016
MAY
JUN
JUL
AUG
SEP
Evolution
OCT
NOV
Dividing line
DEC
JAN 2017
FEB
Actual-planned
* Figures above 50 points indicate an increase in inventory levels or that actual inventory is above planned levels.
3
MAR
APR
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
INDUSTRY’S EXPECTATIONS IN APRIL 2017
Slowdown in entrepreneurs’ expectations The indices of expected demand, exports and purchases of raw materials are above the 50-point mark, indicating optimism among industrial entrepreneurs. Compared with the previous month, however, all expectation indices are down: demand (-1.4 points to 54.8 points), exports (-0.8 points to
53.2 points) and purchases of raw materials (-1.1 points to 52.6 points). The index of expected number of employees is the only one to show an anticipated drop in coming months. The index reached 48.7 points, holding virtually steady as compared to April.
Expectations indices Diffusion indexes (0-100 points)
Demand
Purchases of inputs and raw materials 56.2
Increase
Increase
54.7
53.7
54.8 50
52.2 52.6
50
51.8
49.1
47.8 Decrease
Decrease
JUL
MAY 2016
SEP
NOV
Expected demand
MAR
JAN 2017
45.7
MAY 2016
MAY
Dividing line
JUL
SEP
NOV
JAN 2017
MAR
Expected purchases of inputs and raw materials
Number of employees
Exports
Increase
Increase
Dividing line
54.0
53.5 50
52.5
50
49.1 48.0
MAY
53.2
50.7
48.7 Decrease
Decrease
45.4 43.6
MAY 2016
JUL
SEP
NOV
Expected number of employees
JAN 2017
MAR
MAY 2016
MAY
Dividing line
JUL
SEP
Expected exports
*The index ranges from 0 to 100. Figures above 50 points indicate an expected increase.
4
NOV
JAN 2017
MAR
Dividing line
MAY
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Investment intentions fluctuating once again The index measuring investment intentions over the next months stood at 46.6 points, representing a 0.4-point decline between April and May. The index has held somewhat steady since February, alternating between small positive and negative fluctuations. Despite the 7.2-point year-over-year increase, investment intentions remain at low levels.
Investment intentions Diffusion indices (0-100 points)
60
55
54.6
50
46.6 45
40
MAY 2014
SEP
JAN 2015
MAY
SEP
JAN 2016
MAY
SEP
JAN 2017
MAY
* The higher the index, the more likely industry is to invest.
RESULTS BY INDUSTRIAL ACTIVITY AND COMPANY SIZE Performance of industry PRODUCTION EVOLUTION
NUMBER OF EMPLOYEES EVOLUTION
CAPACITY UTILIZATION (%)
ACTUAL-USUAL CAPACITY UTILIZATION
INVENTORIES LEVELS EVOLUTION
ACTUAL-PLANNED INVENTORIES
Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17 Apr/16 Mar/17 Apr/17
total
42.4
54.8
41.6
43.3
47.5
47.0
64
65
63
34.7
41.2
36.6
48.9
49.1
50.9
49.1
50.3
50.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
48.1
55.3
44.0
44.2
47.5
45.3
70
70
69
39.1
45.0
39.9
46.8
51.2
51.2
43.2
48.4
49.6
Manufacturing 42.2
54.8
41.6
43.2
47.4
47.1
63
65
63
34.5
41.1
36.5
48.9
48.9
50.8
49.3
50.3
50.3
BY COMPANY SIZE Small1
37.7
49.7
41.7
40.5
45.3
45.4
56
58
57
31.3
39.2
35.3
44.7
48.6
48.4
42.8
45.9
45.5
Medium2
40.9
54.0
41.5
43.0
46.4
46.4
61
63
61
33.2
40.1
35.9
48.3
49.3
50.5
48.6
50.0
50.1
Large3
45.6
57.8
41.7
44.8
49.1
48.2
69
70
67
37.1
42.8
37.7
51.3
49.2
52.4
52.5
52.6
52.9
The indicators vary in the 0-100 interval. Figures above 50 points indicate positive evolution, higher-than-planned inventory levels, or higher-than-usual capacity utilization. 1 - Company with 10 to 49 employees. 2 - Company with 50 to 249 employees. 3 - Company with 250-plus employees.
5
Industrial Survey ISSN 1676-0212 • Year 20 • Number 4 • April 2017
Industry’s Expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
May/16
Apr/17
May/17
47.8
56.2
54.8
50.7
54.0
53.2
45.7
53.7
52.6
43.6
49.1
48.7
39.4
47.0
46.6
BY INDUSTRIAL ACTIVITY Mining and quarrying
49.3
52.7
53.3
49.5
54.7
49.2
46.7
49.4
52.4
42.9
47.6
47.4
46.6
51.3
51.1
Manufacturing
47.7
56.3
54.7
50.6
53.9
53.3
45.6
53.9
52.6
43.6
49.1
48.7
39.1
46.9
46.5
BY COMPANY SIZE Small1
45.3
54.4
52.6
47.2
51.6
50.6
43.0
51.3
49.6
41.7
47.0
46.9
27.9
34.0
34.0
Medium2
47.2
55.1
55.6
49.7
54.7
53.7
45.3
53.0
52.8
43.3
48.6
48.7
35.6
43.1
42.2
Large3
49.3
57.7
55.4
52.9
54.8
54.3
47.2
55.3
54.0
44.7
50.5
49.5
47.0
55.4
55.2
The indicators vary in the 0-100 interval. Figures above 50 points indicate positive expectations. * The indicator varies in the 0-100 interval. The higher the index, the more likely industry is to invest. 1 - Company with 10 to 49 employees. 2 - Company with 50 to 249 employees. 3 - Company with 250-plus employees.
i
Learn more
Technical specifications
For more information on the survey, including historical series and methodology, kindly visit: www.cni.org.br/e_sondindustrial
Sample profile: 2,387 enterprises, including 1,015 small, 826 medium and 546 large companies. Data collection period: May 2-12, 2017.
INDUSTRIAL SURVEY | English version of “Sondagem Industrial abril 2017” | Monthly Publication of the National Confederation of Industry - CNI | www.cni.org.br | Policy and Strategy Unit - DIRPE | Economic Policy Unit - PEC| Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Team: Juliana Lucena do Nascimento, Marcelo Souza Azevedo, Roxana Rossy Campos and Taryane Carvalho Perne | CNI Publishing Center | Graphic design supervision: Alisson Costa | Subscriptions: Customer Service - Phone: +55 (61) 3317-9992 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
