Industry continues to improve in August AWS
CNI Indicators ISSN 1676-0212 • Year 20 • Number 8 • August 2017
20 YEARS
INDUSTRIAL SURVEY Industry continues to improve in August The August issue of the Industrial Survey shows the continuation of the positive momentum initiated in July and dispels some of the concerns suggested by the latest edition of the survey. For the first time since October 2013, the production index has surpassed the 50-point mark
47.7
In July, the survey brought up two concerns: unbalanced inventory levels and low capacity utilization rates. In August, industry managed to readjust inventories by eliminating the excess levels that had slowly accumulated over the year. Capacity utilization in turn, which in July stood at the same level as that recorded in a weak 2016, edged up by two percentage points to 67% in August. Albeit still low, the figure is up by one percentage point from that observed in 2015 and 2016.
JUN
In addition, the expectations indices continued to trend upward. Entrepreneurs’ optimism about demand, purchases of raw materials and number of employees is at all-time high since early 2014.
Production Diffusion index (0-100)*
54.8 53.8 Increase 50
50.5
Decrease
41.6 APR 2017
MAY
for the second consecutive month. The index of number of employees in turn showed that industrial jobs remained virtually stable. In addition, the index of expected number of employees indicates that no further layoffs are expected. This is to say that the trend toward the end of layoffs is materializing.
Production
JUL
AUG
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
1
Investment intentions also continue to improve: the indicator has exceeded its historical average for the second month in a row.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
PERFORMANCE OF INDUSTRY IN AUGUST 2017
Industrial production grows strongly The production index reached 54.8 points in August, showing a significant increase in production as compared to July. While production usually increases in August on a month-over-month basis (indices above 50 points), the growth rate in 2017 is similar to that observed between 2011 and 2014. In 2015, the index had dropped in August (index
below 50 points), while in 2016 it grew only moderately, reaching 50.8 points. The index of number of employees stood at 49.1 points. As it approached the 50-point dividing line, the index shows that employee numbers held steady in August.
Production index in August (2011-2017) Diffusion index (0-100)*
54.3
54.8
54.7 52.7
Increase 50
50.8
Decrease 48.2
42.7 2011
2012
2013
2014
Production
2015
2016
2017
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
Increased capacity utilization The average capacity utilization rate in industry reached 67% in August, representing a two percentage point increase as compared to July. The figure is up by one percentage point from 2016 and 2015, but is down from the levels seen in previous years (the indicator averaged 73.8% between 2011 and 2014).
2
The indicator measuring actual-usual activity levels grew from 40.9 points to 43.4 points. Although still far from the 50-point mark, which would mean that capacity utilization is at usual levels, the index reached its highest level since March 2014.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
Average capacity utilization rate Percentage %
76 74 72
2011
70
2012
68
2013
67% Aug/17
2014
66
2015
64
2016
62
2017
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Inventory at adjusted levels once again The inventory index amounted to 49.5 points. As it stood close to the dividing line, the indicator shows that inventory held steady between July and August.
The index measuring actual-planned inventory levels dropped by one point and reached the 50-point mark, meaning that inventory is at the levels planned by companies. The decline reversed all the gains recorded throughout the year.
Indices of inventory and actual-planned inventory Diffusion index (0-100)*
Increase/ above planned level
49.9
50 50.4
50.1
50.3
50.9 50.4
50.9 50.7
51.1 51.0
50.1
49.9
50.0
49.8
49.7
49.5
49.4 49.1
49.0
Decrease/ under planned level
48.3
46.5 AUG 2016
SEP
OCT
NOV
DEC
JAN 2017
Evolution
FEB
MAR
Dividing line
APR
MAY
Actual-planned
* Figures above 50 points indicate an increase in inventory levels or higher-than-planned inventory levels.
3
JUN
JUL
AUG
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
INDUSTRY’S EXPECTATIONS IN SEPTEMBER 2017
More optimistic entrepreneurs Business confidence keeps growing. The index of expected demand is up for the fourth month in a row in September to its highest point since March 2014: 56.9 points. The index measuring expected purchases of raw materials increased by 0.8 points and hit the mark of 54.5 points – its highest level since April 2014. The index of expected number of employees increased by only
0.2 points, but stood virtually on the 50-point dividing line at 49.6 points, meaning that industrial employment is not likely to experience further declines. The index of expected export volumes remained unchanged at 52.7 points, which shows that exports are expected to continue to increase.
Expectation index Diffusion indices (0-100 points)*
Demand
Purchases of inputs and raw materials 56.9
Increase
54.9
54.5
Increase
56.4 55.7
52.2 50
50
Decrease
Decrease
SEP 2016
NOV
JAN 2017
MAY
MAR
Expected demand
JUL
SEP
SEP 2016
Dividing line
53.6
NOV
JAN 2017
MAR
JUL
MAY
Expected purchases of inputs and raw materials
Number of employees
Exports
Increase
Increase
53.7
SEP
Dividing line
52.7
52.4 53.0
50
50
49.6 47.9
48.8
52.7
49.4 Decrease
Decrease
SEP 2016
NOV
JAN 2017
MAR
Expected number of employees
MAY
JUL
SEP 2016
SEP
Dividing line
NOV
JAN 2017
Expected exports
* Figures above 50 points indicate an expected increase.
4
MAR
MAY
JUL
Dividing line
SEP
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
Willingness to invest increases again The index measuring investment intentions increased for the third consecutive month in September, hitting the mark of 49.4 points. The index is 6.0 points higher than that recorded in September 2016 and reached its highest point since March 2015. As in August, the index exceeded its 54-point historical average in September. The series began in November 2013 and hit its highest level in January 2014, when the indicator amounted to 61.5 points.
Investment intentions Diffusion indices (0-100 points)*
55
51
49.4 47
43
39
SEP 2014
JAN 2015
MAY
SEP
JAN 2016
MAY
SEP
JAN 2017
MAY
SEP
* 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
Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17
Total
50.8
50.5
54.8
46.3
48.2
49.1
66
65
67
38.3
40.9
43.4
50.4
51.1
49.5
50.8
51.0
50.0
BY INDUSTRIAL ACTIVITY Mining and quarrying
54.2
50.7
52.9
44.9
46.5
48.6
73
70
72
45.4
43.6
44.7
53.1
47.8
54.8
52.3
46.7
52.4
Manufacturing 50.6
50.5
54.9
46.4
48.3
49.2
66
65
67
38.1
40.8
43.3
50.3
51.2
49.3
50.8
51.1
49.9
BY COMPANY SIZE Small1
46.0
46.7
50.7
45.0
46.9
47.9
60
58
60
37.3
39.1
41.7
47.4
48.5
46.6
45.8
46.8
45.2
Medium2
48.5
48.6
53.5
44.9
46.8
47.8
64
63
65
37.5
39.1
42.4
48.9
50.1
48.5
49.6
50.5
49.6
Large3
54.4
53.3
57.5
47.6
49.5
50.4
71
70
72
39.3
42.7
44.7
52.7
52.9
51.4
54.0
53.3
52.6
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 8 • August 2017
Industry’s Expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
54.9
56.4
56.9
52.4
52.7
52.7
52.2
53.7
54.5
47.9
49.4
49.6
43.4
47.9
49.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
53.5
51.7
50.6
49.1
51.5
52.8
49.5
49.8
47.7
44.9
45.1
46.0
42.3
51.1
53.3
Manufacturing
55.0
56.6
57.1
52.3
52.7
52.6
52.3
53.9
54.7
48.0
49.5
49.6
43.4
47.8
49.2
BY COMPANY SIZE Small1
52.8
53.7
55.7
49.8
51.3
48.3
49.5
51.8
53.4
47.1
48.5
48.7
32.8
37.0
37.3
Medium2
54.9
56.0
56.3
50.9
52.7
54.0
52.7
53.5
54.2
48.2
48.5
49.6
39.2
43.4
44.7
Large3
56.0
58.0
57.8
54.4
53.4
54.2
53.2
54.8
55.2
48.1
50.4
50.0
50.9
55.7
57.8
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.
Technical specifications Sample profile: 2,376 enterprises, including 978 small, 867 medium and 531 large companies. Data collection period: September 1-15, 2017.
i
Learn more For more information on the survey, including historical series and methodology, kindly visit: www.cni.org.br/e_sondindustrial
INDUSTRIAL SURVEY | English version of “Sondagem Industrial Agosto 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: 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.
20 YEARS
INDUSTRIAL SURVEY Industry continues to improve in August The August issue of the Industrial Survey shows the continuation of the positive momentum initiated in July and dispels some of the concerns suggested by the latest edition of the survey. For the first time since October 2013, the production index has surpassed the 50-point mark
47.7
In July, the survey brought up two concerns: unbalanced inventory levels and low capacity utilization rates. In August, industry managed to readjust inventories by eliminating the excess levels that had slowly accumulated over the year. Capacity utilization in turn, which in July stood at the same level as that recorded in a weak 2016, edged up by two percentage points to 67% in August. Albeit still low, the figure is up by one percentage point from that observed in 2015 and 2016.
JUN
In addition, the expectations indices continued to trend upward. Entrepreneurs’ optimism about demand, purchases of raw materials and number of employees is at all-time high since early 2014.
Production Diffusion index (0-100)*
54.8 53.8 Increase 50
50.5
Decrease
41.6 APR 2017
MAY
for the second consecutive month. The index of number of employees in turn showed that industrial jobs remained virtually stable. In addition, the index of expected number of employees indicates that no further layoffs are expected. This is to say that the trend toward the end of layoffs is materializing.
Production
JUL
AUG
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
1
Investment intentions also continue to improve: the indicator has exceeded its historical average for the second month in a row.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
PERFORMANCE OF INDUSTRY IN AUGUST 2017
Industrial production grows strongly The production index reached 54.8 points in August, showing a significant increase in production as compared to July. While production usually increases in August on a month-over-month basis (indices above 50 points), the growth rate in 2017 is similar to that observed between 2011 and 2014. In 2015, the index had dropped in August (index
below 50 points), while in 2016 it grew only moderately, reaching 50.8 points. The index of number of employees stood at 49.1 points. As it approached the 50-point dividing line, the index shows that employee numbers held steady in August.
Production index in August (2011-2017) Diffusion index (0-100)*
54.3
54.8
54.7 52.7
Increase 50
50.8
Decrease 48.2
42.7 2011
2012
2013
2014
Production
2015
2016
2017
Dividing line
* Figures above 50 points indicate a month-over-month increase in production.
Increased capacity utilization The average capacity utilization rate in industry reached 67% in August, representing a two percentage point increase as compared to July. The figure is up by one percentage point from 2016 and 2015, but is down from the levels seen in previous years (the indicator averaged 73.8% between 2011 and 2014).
2
The indicator measuring actual-usual activity levels grew from 40.9 points to 43.4 points. Although still far from the 50-point mark, which would mean that capacity utilization is at usual levels, the index reached its highest level since March 2014.
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
Average capacity utilization rate Percentage %
76 74 72
2011
70
2012
68
2013
67% Aug/17
2014
66
2015
64
2016
62
2017
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Inventory at adjusted levels once again The inventory index amounted to 49.5 points. As it stood close to the dividing line, the indicator shows that inventory held steady between July and August.
The index measuring actual-planned inventory levels dropped by one point and reached the 50-point mark, meaning that inventory is at the levels planned by companies. The decline reversed all the gains recorded throughout the year.
Indices of inventory and actual-planned inventory Diffusion index (0-100)*
Increase/ above planned level
49.9
50 50.4
50.1
50.3
50.9 50.4
50.9 50.7
51.1 51.0
50.1
49.9
50.0
49.8
49.7
49.5
49.4 49.1
49.0
Decrease/ under planned level
48.3
46.5 AUG 2016
SEP
OCT
NOV
DEC
JAN 2017
Evolution
FEB
MAR
Dividing line
APR
MAY
Actual-planned
* Figures above 50 points indicate an increase in inventory levels or higher-than-planned inventory levels.
3
JUN
JUL
AUG
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
INDUSTRY’S EXPECTATIONS IN SEPTEMBER 2017
More optimistic entrepreneurs Business confidence keeps growing. The index of expected demand is up for the fourth month in a row in September to its highest point since March 2014: 56.9 points. The index measuring expected purchases of raw materials increased by 0.8 points and hit the mark of 54.5 points – its highest level since April 2014. The index of expected number of employees increased by only
0.2 points, but stood virtually on the 50-point dividing line at 49.6 points, meaning that industrial employment is not likely to experience further declines. The index of expected export volumes remained unchanged at 52.7 points, which shows that exports are expected to continue to increase.
Expectation index Diffusion indices (0-100 points)*
Demand
Purchases of inputs and raw materials 56.9
Increase
54.9
54.5
Increase
56.4 55.7
52.2 50
50
Decrease
Decrease
SEP 2016
NOV
JAN 2017
MAY
MAR
Expected demand
JUL
SEP
SEP 2016
Dividing line
53.6
NOV
JAN 2017
MAR
JUL
MAY
Expected purchases of inputs and raw materials
Number of employees
Exports
Increase
Increase
53.7
SEP
Dividing line
52.7
52.4 53.0
50
50
49.6 47.9
48.8
52.7
49.4 Decrease
Decrease
SEP 2016
NOV
JAN 2017
MAR
Expected number of employees
MAY
JUL
SEP 2016
SEP
Dividing line
NOV
JAN 2017
Expected exports
* Figures above 50 points indicate an expected increase.
4
MAR
MAY
JUL
Dividing line
SEP
Industrial Survey ISSN 1676-0212 • Year 20 • Number 8 • August 2017
Willingness to invest increases again The index measuring investment intentions increased for the third consecutive month in September, hitting the mark of 49.4 points. The index is 6.0 points higher than that recorded in September 2016 and reached its highest point since March 2015. As in August, the index exceeded its 54-point historical average in September. The series began in November 2013 and hit its highest level in January 2014, when the indicator amounted to 61.5 points.
Investment intentions Diffusion indices (0-100 points)*
55
51
49.4 47
43
39
SEP 2014
JAN 2015
MAY
SEP
JAN 2016
MAY
SEP
JAN 2017
MAY
SEP
* 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
Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17 Aug/16 Jul/17 Aug/17
Total
50.8
50.5
54.8
46.3
48.2
49.1
66
65
67
38.3
40.9
43.4
50.4
51.1
49.5
50.8
51.0
50.0
BY INDUSTRIAL ACTIVITY Mining and quarrying
54.2
50.7
52.9
44.9
46.5
48.6
73
70
72
45.4
43.6
44.7
53.1
47.8
54.8
52.3
46.7
52.4
Manufacturing 50.6
50.5
54.9
46.4
48.3
49.2
66
65
67
38.1
40.8
43.3
50.3
51.2
49.3
50.8
51.1
49.9
BY COMPANY SIZE Small1
46.0
46.7
50.7
45.0
46.9
47.9
60
58
60
37.3
39.1
41.7
47.4
48.5
46.6
45.8
46.8
45.2
Medium2
48.5
48.6
53.5
44.9
46.8
47.8
64
63
65
37.5
39.1
42.4
48.9
50.1
48.5
49.6
50.5
49.6
Large3
54.4
53.3
57.5
47.6
49.5
50.4
71
70
72
39.3
42.7
44.7
52.7
52.9
51.4
54.0
53.3
52.6
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 8 • August 2017
Industry’s Expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
54.9
56.4
56.9
52.4
52.7
52.7
52.2
53.7
54.5
47.9
49.4
49.6
43.4
47.9
49.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
53.5
51.7
50.6
49.1
51.5
52.8
49.5
49.8
47.7
44.9
45.1
46.0
42.3
51.1
53.3
Manufacturing
55.0
56.6
57.1
52.3
52.7
52.6
52.3
53.9
54.7
48.0
49.5
49.6
43.4
47.8
49.2
BY COMPANY SIZE Small1
52.8
53.7
55.7
49.8
51.3
48.3
49.5
51.8
53.4
47.1
48.5
48.7
32.8
37.0
37.3
Medium2
54.9
56.0
56.3
50.9
52.7
54.0
52.7
53.5
54.2
48.2
48.5
49.6
39.2
43.4
44.7
Large3
56.0
58.0
57.8
54.4
53.4
54.2
53.2
54.8
55.2
48.1
50.4
50.0
50.9
55.7
57.8
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.
Technical specifications Sample profile: 2,376 enterprises, including 978 small, 867 medium and 531 large companies. Data collection period: September 1-15, 2017.
i
Learn more For more information on the survey, including historical series and methodology, kindly visit: www.cni.org.br/e_sondindustrial
INDUSTRIAL SURVEY | English version of “Sondagem Industrial Agosto 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: 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.
