Optimistic expectations amid still-low activity levels - Portal da Indústria
CNI Indicators ISSN 1676-0212 • Year 19 • Number 6 • June 2016
INDUSTRIAL SURVEY Optimistic expectations amid still-low activity levels Data from the Industrial Survey show that industry has recovered to some extent. This trend results from a combination of positive expectation indicators – including demand, export volumes, and purchases of raw materials – and a reduced rate of decline of certain coincident indicators, such as production and employment. Another positive point is inventories, which remain at level as planned by the industry.
Companies in the industrial sector continue to face a delicate situation. Business financial conditions have deteriorated significantly, access to credit has become even more restricted, and idle capacity remains extremely high, hampering any investment expectations. Among the main difficulties faced by companies in the second quarter of 2016, special mention should be made of high tax burden, insufficient domestic demand, high interest rates, and client delinquency.
Expected demand, export volumes and purchases of raw materials Diffusion indices (0-100 points)
55.2 Increase 50 Decrease
52.9
52.4
51.8 50.8 50.0
JUL 2014 Demand
OCT
JAN 2015
JUL
APR
Export volumes
OCT
JAN 2016
Purchases of raw materials
1
APR
JUL
Dividing line
The indicators range from 0 to 100. Figures above 50 points indicate an expected increase in demand, export volumes or purchases of raw materials.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
PERFORMANCE OF INDUSTRY IN JUNE 2016
Production and employment fall less than in 2015 The indicators of production and number of employees have been trending upward since the beginning of the year. As the indices remain below 50 points, they indicate that both activity and jobs have fallen at a slower pace. The indicators amounted, respectively, to 46.6 points and 44.6 points in June, indicating a smaller decline as compared to the same month in 2015. In the case
of production, the decline was also lower than that recorded in June 2014, 2013 and 2012. The evolution indices range from 0 to 100 points, with readings below 50 indicating a decline in production and/or number of employees. The further below 50 points, the more significant and widespread the drop.
Production evolution Diffusion index (0-100 points)
Increase
50
51.2 48.0 46.6
46.0
45.5
Decrease
39.6
2010
2011
2012
2013
Production
2014
40.3
2015
2016
Dividing line
The index varies in the 0-100 interval. Figures above 50 points indicate a month-over-month increase in production.
High industrial idleness The average capacity utilization rate has held steady at 64% since March 2016. The figure is almost the same as that recorded in June 2015 (variation within the margin of error of plus or minus one percentage point), but is down by 8 percentage points from the average for the month of June.
2
The index of actual-usual capacity utilization confirms the high idleness in the industry, as it stood at 36.1 points in June, almost the same level (variation within the margin of error) recorded in May. The index is 13.9 points short of the 50-point dividing line, indicating that capacity utilization is below usual levels for the month.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Falling inventories Inventories fell at a faster pace in June and are down for the eighth month in a row. The finished product inventory index stood at 47.8 points, a figure 1.1 points lower than that recorded in May. The index ranges from 0 to 100, with readings below 50 indicating a decline in inventory levels.
Despite the decline, inventories remain virtually at planned levels. The index of actual-planned inventory levels fluctuated within the margin of error, down from 49.8 points in May to 49.3 points in June, standing virtually on the 50-point dividing line.
Inventory levels* and actual-planned inventory levels** Diffusion indices (0-100 points)
Increase/ above planned levels 52.1 50.7
50
51.0
50.8
49.8
49.3
49.7 48.7
48.4
48.2
48.9
48.9
48.9 47.8
Decrease/ below planned levels
46.6
JUN 2015
AUG
OCT
DEC
Evolution
FEB 2016
Actual-planned
APR
JUN
Dividing line
* The indicator varies in the 0-100 interval. Figures above 50 points indicate a month-over-month increase in inventory levels. ** The indicator varies in the 0-100 interval. Figures above 50 points indicate that actual inventory is above planned levels.
FINANCIAL CONDITIONS OF INDUSTRY IN THE SECOND QUARTER OF 2016
Prices of raw materials slow down Raw materials prices have been growing at a slower pace since the fourth quarter of 2015. The index is down by 5.6 points in the period. In the second quarter of 2016, the indicator amounted
3
to 63.6 points, down by 1.1 points from the first quarter. Figures above 50 points indicate an increase in average prices of raw materials.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Financial conditions keep deteriorating After hitting an all-time low in the first quarter, the indices of satisfaction with financial situation and profits grew by 1.6 points and 2.2 points, respectively, in the second quarter. Both indices, however, remain significantly below the 50-point mark, showing that entrepreneurs are strongly dissatisfied with their companies’ financial situation and profit margins. The indices range from 0 to 100 points, with readings below 50 points indicating dissatisfaction with profits or financial conditions.
Satisfaction with profits and with financial situation Diffusion indices (0-100 points)
Satisfaction 50 Insatisfaction
47.2 39.5 42.0
37.9 34.9 32.7
I-14
II-14
III-14 IV-14
I-15
Financial situation
II-15 III-15
IV-15
Profits
Dividing line
I-16
II-16
The indicators range from 0 to 100. Figures above 50 points indicate satisfaction with profits and financial conditions.
Access to credit has never been harder The index of ease of access to credit remains below 50 points, reflecting the difficulties faced by companies in accessing credit. The index held steady at 29 points, the lowest level ever recorded in its historical series started in 2007, indicating that companies have never had a harder time accessing credit.
Ease of access to credit Diffusion indices (0-100 points)
Increase 50 Decrease
39.2
I-14
II-14
III-14 IV-14
I-15
II-15 III-15
Ease of access to credit
4
29.1
29.0
I-16
II-16
IV-15
Dividing line
The indicators range from 0 to 100. Figures above 50 points indicate an easier access to credit.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
PROBLEMS FACED BY INDUSTRY IN THE SECOND QUARTER OF 2016
Main problems facing industry are high tax burden and insufficient domestic demand A high tax burden and insufficient domestic demand are still the main problems faced by the manufacturing and mining and quarrying industries. These issues were indicated by 44.9% and 43.2% of firms, respectively. The problems of high interest rates and client delinquency come next with 27% and 25.2% of answers, respectively. Special mention should be made of the decline in importance of the issue of lack or high cost of energy as compared to the first quarter: the percentage of companies indicating this problem fell from 20% to 14.1%. The number of companies indicating exchange rate as an issue also fell from 20% to 18.2%.
Main problems faced by industry in the second quarter of 2016 Percentage (%) 44,9 45,1
High tax burden
43.2 42.4
Insufficient domestic demand 27.0 26.9
High interest rates
25.2 24.9
Client delinquency
23.6 23.6
Lack or high costs of raw materials
22.1 21.0
Lack of working capital
18.2 20.0
Exchange rate
14.1
Lack or high cost of energy
20.0 13.1 12.7
Unfair competition
10.1 10.2
Insufficient foreign demand Lack of long-term funding
9.6 9.2
Excessive red tape
8.7 7.7
Difficulties with transportation logistics
6.7 5.4
Competition with imported goods
6.1 5.5
Lack or high cost of skilled labor
5.1 6.0
Legal uncertainty Other None
4.0 4.0 3.3 6.5 3.2 1.6
2nd quarter 2016 1st quarter 2016
In the survey, entrepreneurs are asked to indicate up to three items representing the main problems faced by their companies, so the sum of the percentages exceeds 100%.
5
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
EXPECTATIONS IN JULY 2016
More optimistic expectations The expectations indices are beginning to show signs that entrepreneurs are optimistic about the next six months. The index of expected demand hit the mark of 52.9 points in July and has been above 50 points for two consecutive months now, suggesting an expected increase in demand over the next six months.
At 50.8 points, the indicator has broken the 50-point dividing line for the first time since October 2014. Considering the margin of error of plus or minus one percentage point, we can say that entrepreneurs are no longer expecting to reduce their purchases of raw materials over the next six months.
The export expectation index hovered within the margin of error – down from 52.5 points in May to 51.8 points in June – and remains above the 50-point mark, indicating an expected increase in exports.
The employment expectation index, which has been growing since January, reached 46.3 points in July. The fact that the figure is below the 50-point mark still indicates an expected decline in jobs, but the index has been approaching that mark, suggesting that employment will likely fall at a slower pace.
The index of expected purchases of raw materials edged up by 2.3 points between June and July.
Expected number of employees Diffusion indices (0-100 points)
Increase 50 Decrease
48.2 46.3
JUL 2014
OCT
JAN 2015
APR
JUL
Expected number of employees
OCT
JAN 2016
APR
JUL
Dividing line
The indicators range from 0 to 100. Readings above 50 indicate an expected increase in number of employees.
6
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Investment intentions remain low A scenario of falling production and high industrial idleness has kept business investment intentions at low levels. The investment intentions index remained virtually unchanged from June to July, when it grew by 0.2 points to 41.4 points.
Investment intentions Diffusion indices (0-100 points)
65
60.9 60 55 50 45
41.4
40
NOV 2013
MAR 2014
JUL
NOV
MAR 2015
JUL
NOV
JUL
MAR 2016
The index ranges from 0 to 100 points. The higher the index, the more likely industry is to invest.
RESULTS Main problems GENERAL
SMALL
MEDIUM
LARGE
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
High tax burden
45.1
44.9
1
46.7
46.1
1
46.6
47.3
1
43.5
43.1
2
Insufficient domestic demand
42.4
43.2
2
39.1
37.6
2
41.4
40.5
2
44.6
47.5
1
High interest rates
26.9
27.0
3
28.0
27.8
4
26.0
26.5
3
27.0
27.0
3
Client delinquency
24.9
25.2
4
30.7
31.1
3
27.3
25.5
4
20.7
22.1
6
Lack or high costs of raw materials
23.6
23.6
5
24.3
24.2
6
25.0
24.9
6
22.6
22.6
5
Lack of working capital
21.0
22.1
6
22.3
24.5
5
22.6
25.0
5
19.4
19.3
7
Exchange rate
20.0
18.2
7
10.0
7.2
13
16.4
12.3
9
26.8
26.8
4
Lack or high cost of energy
20.0
14.1
8
24.2
16.9
8
21.3
16.3
7
17.2
11.7
8
Unfair competition
12.7
13.1
9
18.6
18.4
7
12.6
15.5
8
9.9
9.2
11
Insufficient foreign demand
10.2
10.1
10
9.3
10.1
10
9.5
7.6
12
11.0
11.3
9
Lack of long-term funding
9.2
9.6
11
6.9
8.5
11
11.2
10.4
10
9.4
9.7
10
Excessive red tape
7.7
8.7
12
8.6
10.9
9
6.5
7.7
11
7.9
8.2
12
Difficulties with transportation logistics
5.4
6.7
13
4.5
6.1
14
5.3
6.6
14
5.9
7.1
13
Competition with imported goods
5.5
6.1
14
3.7
4.6
15
5.8
6.7
13
6.2
6.6
14
Lack or high cost of skilled labor
6.0
5.1
15
9.0
7.6
12
6.8
5.3
15
4.0
3.7
16
Legal uncertainty
4.0
4.0
16
4.9
3.6
16
4.3
4.4
16
3.3
4.0
15
Other
6.5
3.3
17
5.9
3.3
17
7.0
4.0
17
6.4
3.0
17
None
1.6
3.2
2.3
4.4
1.4
3.1
1.3
2.6
ITENS
7
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Performance of industry NUMBER OF EMPLOYEES EVOLUTION
PRODUCTION EVOLUTION
Total
CAPACITY UTILIZATION (%)
ACTUAL-USUAL CAPACITY UTILIZATION
INVENTORIES LEVELS EVOLUTION
ACTUAL-PLANNED INVENTORIES
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
40.3
45.5
46.6
40.7
43.7
44.6
65
64
64
33.8
35.1
36.1
52.1
48.9
47.8
53.1
49.8
49.3
BY INDUSTRIAL ACTIVITY Mining and quarrying
45.8
50.5
52.4
42.9
45.6
44.2
72
73
70
40.8
39.3
42.8
45.0
48.4
46.5
47.0
49.4
46.5
Manufacturing 45.3
46.3
47.2
40.6
43.6
44.6
65
64
64
33.4
34.9
35.9
52.4
48.8
47.9
53.4
49.8
49.4
BY COMPANY SIZE Small1
36.9
40.6
43.3
40.2
41.2
43.2
58
57
57
32.8
32.3
35.1
47.1
45.0
44.2
47.0
44.4
43.8
Medium2
39.6
44.4
45.8
40.3
43.1
43.7
63
62
62
32.7
34.6
35.4
50.8
48.7
47.5
52.0
48.6
48.4
Large3
42.3
48.5
48.6
41.2
45.3
45.7
70
69
69
34.8
36.7
37.0
55.2
51.0
49.8
56.8
53.1
52.6
The indicators vary in the 0-100 interval. Figures above 50 points suggest a positive evolution, higher-than-planned inventories or higher-than-usual capacity utilization. 1 Company with 10-49 employees. 2 - Company with 50-249 employees. 3 - Company with 250-plus employees.
Financial conditions in the quarter PROFITS
Total
AVERAGE PRICE OF RAW MATERIALS
FINANCIAL SITUATION
ACCESS TO CREDIT
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
33.4
32.7
34.9
64.7
64.7
63.6
39.3
37.9
39.5
31.6
29.1
29.0
BY INDUSTRIAL ACTIVITY Mining and quarrying
37.2
31.5
37.0
59.1
60.4
58.2
42.0
31.4
38.5
34.2
33.0
32.9
Manufacturing
33.3
32.8
34.8
64.9
64.9
63.9
39.2
38.1
39.6
31.5
29.0
28.9
BY COMPANY SIZE Small1
30.3
28.7
31.2
65.9
66.3
64.6
33.8
32.5
34.3
30.6
26.6
25.9
Medium2
31.4
30.4
32.6
65.3
65.4
63.8
36.8
36.0
37.2
29.0
25.6
26.8
Large3
36.0
35.9
37.9
63.7
63.5
63.1
43.4
41.6
43.3
33.5
32.1
31.7
The indicators range in the 0-100 interval. Figures above 50 indicate satisfaction with profits and financial conditions, easier access to credit, or an increase in the average price of raw materials. 1 - Company with 10-49 employees. 2 - Company with 50-249 employees. 3 - Company with 250-plus employees.
8
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Industrial expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
46.6
51.0
52.9
49.9
52.5
51.8
44.6
48.5
50.8
41.1
45.3
46.3
41.3
41.2
41.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
47.3
50.2
48.4
47.6
52.4
50.7
44.1
45.3
44.9
41.5
43.6
42.8
49.2
43.6
42.0
Manufacturing
46.6
51.1
53.1
49.9
52.3
51.7
44.6
48.7
51.0
41.1
45.4
46.5
40.9
41.1
41.4
BY COMPANY SIZE Small1
45.3
47.2
50.9
45.3
46.3
49.1
43.6
45.2
48.5
41.0
42.9
45.2
32.3
29.9
30.5
Medium2
46.8
50.7
53.2
49.4
53.7
51.1
44.3
47.8
50.7
41.1
44.6
45.9
36.3
37.3
36.8
Large3
47.1
53.1
53.7
52.4
54.9
53.6
45.3
50.6
51.9
41.2
46.9
47.1
48.3
48.8
49.2
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 50-249 employees. 3 - Company with 250-plus employees.
i
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Technical Specifications
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Sample profile: 2,589 enterprises, including 1,054 small, 946 medium and 589 large companies. Data collection period: July 1st - 13th, 2016.
INDUSTRIAL SURVEY | English version of “Sondagem Industrial Junho/2016” | 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, Flavia Coelho Branco Junqueira Ferraz, Aretha Silicia Lopez Soares, Roxana Rossy Campos e Taryane Carvalho Perné | CNI Publishing Center | Graphic design supervision: Carla Gadelha | Subscriptions: Customer Service - Phone: +55 (61) 3317-9989 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
INDUSTRIAL SURVEY Optimistic expectations amid still-low activity levels Data from the Industrial Survey show that industry has recovered to some extent. This trend results from a combination of positive expectation indicators – including demand, export volumes, and purchases of raw materials – and a reduced rate of decline of certain coincident indicators, such as production and employment. Another positive point is inventories, which remain at level as planned by the industry.
Companies in the industrial sector continue to face a delicate situation. Business financial conditions have deteriorated significantly, access to credit has become even more restricted, and idle capacity remains extremely high, hampering any investment expectations. Among the main difficulties faced by companies in the second quarter of 2016, special mention should be made of high tax burden, insufficient domestic demand, high interest rates, and client delinquency.
Expected demand, export volumes and purchases of raw materials Diffusion indices (0-100 points)
55.2 Increase 50 Decrease
52.9
52.4
51.8 50.8 50.0
JUL 2014 Demand
OCT
JAN 2015
JUL
APR
Export volumes
OCT
JAN 2016
Purchases of raw materials
1
APR
JUL
Dividing line
The indicators range from 0 to 100. Figures above 50 points indicate an expected increase in demand, export volumes or purchases of raw materials.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
PERFORMANCE OF INDUSTRY IN JUNE 2016
Production and employment fall less than in 2015 The indicators of production and number of employees have been trending upward since the beginning of the year. As the indices remain below 50 points, they indicate that both activity and jobs have fallen at a slower pace. The indicators amounted, respectively, to 46.6 points and 44.6 points in June, indicating a smaller decline as compared to the same month in 2015. In the case
of production, the decline was also lower than that recorded in June 2014, 2013 and 2012. The evolution indices range from 0 to 100 points, with readings below 50 indicating a decline in production and/or number of employees. The further below 50 points, the more significant and widespread the drop.
Production evolution Diffusion index (0-100 points)
Increase
50
51.2 48.0 46.6
46.0
45.5
Decrease
39.6
2010
2011
2012
2013
Production
2014
40.3
2015
2016
Dividing line
The index varies in the 0-100 interval. Figures above 50 points indicate a month-over-month increase in production.
High industrial idleness The average capacity utilization rate has held steady at 64% since March 2016. The figure is almost the same as that recorded in June 2015 (variation within the margin of error of plus or minus one percentage point), but is down by 8 percentage points from the average for the month of June.
2
The index of actual-usual capacity utilization confirms the high idleness in the industry, as it stood at 36.1 points in June, almost the same level (variation within the margin of error) recorded in May. The index is 13.9 points short of the 50-point dividing line, indicating that capacity utilization is below usual levels for the month.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Falling inventories Inventories fell at a faster pace in June and are down for the eighth month in a row. The finished product inventory index stood at 47.8 points, a figure 1.1 points lower than that recorded in May. The index ranges from 0 to 100, with readings below 50 indicating a decline in inventory levels.
Despite the decline, inventories remain virtually at planned levels. The index of actual-planned inventory levels fluctuated within the margin of error, down from 49.8 points in May to 49.3 points in June, standing virtually on the 50-point dividing line.
Inventory levels* and actual-planned inventory levels** Diffusion indices (0-100 points)
Increase/ above planned levels 52.1 50.7
50
51.0
50.8
49.8
49.3
49.7 48.7
48.4
48.2
48.9
48.9
48.9 47.8
Decrease/ below planned levels
46.6
JUN 2015
AUG
OCT
DEC
Evolution
FEB 2016
Actual-planned
APR
JUN
Dividing line
* The indicator varies in the 0-100 interval. Figures above 50 points indicate a month-over-month increase in inventory levels. ** The indicator varies in the 0-100 interval. Figures above 50 points indicate that actual inventory is above planned levels.
FINANCIAL CONDITIONS OF INDUSTRY IN THE SECOND QUARTER OF 2016
Prices of raw materials slow down Raw materials prices have been growing at a slower pace since the fourth quarter of 2015. The index is down by 5.6 points in the period. In the second quarter of 2016, the indicator amounted
3
to 63.6 points, down by 1.1 points from the first quarter. Figures above 50 points indicate an increase in average prices of raw materials.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Financial conditions keep deteriorating After hitting an all-time low in the first quarter, the indices of satisfaction with financial situation and profits grew by 1.6 points and 2.2 points, respectively, in the second quarter. Both indices, however, remain significantly below the 50-point mark, showing that entrepreneurs are strongly dissatisfied with their companies’ financial situation and profit margins. The indices range from 0 to 100 points, with readings below 50 points indicating dissatisfaction with profits or financial conditions.
Satisfaction with profits and with financial situation Diffusion indices (0-100 points)
Satisfaction 50 Insatisfaction
47.2 39.5 42.0
37.9 34.9 32.7
I-14
II-14
III-14 IV-14
I-15
Financial situation
II-15 III-15
IV-15
Profits
Dividing line
I-16
II-16
The indicators range from 0 to 100. Figures above 50 points indicate satisfaction with profits and financial conditions.
Access to credit has never been harder The index of ease of access to credit remains below 50 points, reflecting the difficulties faced by companies in accessing credit. The index held steady at 29 points, the lowest level ever recorded in its historical series started in 2007, indicating that companies have never had a harder time accessing credit.
Ease of access to credit Diffusion indices (0-100 points)
Increase 50 Decrease
39.2
I-14
II-14
III-14 IV-14
I-15
II-15 III-15
Ease of access to credit
4
29.1
29.0
I-16
II-16
IV-15
Dividing line
The indicators range from 0 to 100. Figures above 50 points indicate an easier access to credit.
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
PROBLEMS FACED BY INDUSTRY IN THE SECOND QUARTER OF 2016
Main problems facing industry are high tax burden and insufficient domestic demand A high tax burden and insufficient domestic demand are still the main problems faced by the manufacturing and mining and quarrying industries. These issues were indicated by 44.9% and 43.2% of firms, respectively. The problems of high interest rates and client delinquency come next with 27% and 25.2% of answers, respectively. Special mention should be made of the decline in importance of the issue of lack or high cost of energy as compared to the first quarter: the percentage of companies indicating this problem fell from 20% to 14.1%. The number of companies indicating exchange rate as an issue also fell from 20% to 18.2%.
Main problems faced by industry in the second quarter of 2016 Percentage (%) 44,9 45,1
High tax burden
43.2 42.4
Insufficient domestic demand 27.0 26.9
High interest rates
25.2 24.9
Client delinquency
23.6 23.6
Lack or high costs of raw materials
22.1 21.0
Lack of working capital
18.2 20.0
Exchange rate
14.1
Lack or high cost of energy
20.0 13.1 12.7
Unfair competition
10.1 10.2
Insufficient foreign demand Lack of long-term funding
9.6 9.2
Excessive red tape
8.7 7.7
Difficulties with transportation logistics
6.7 5.4
Competition with imported goods
6.1 5.5
Lack or high cost of skilled labor
5.1 6.0
Legal uncertainty Other None
4.0 4.0 3.3 6.5 3.2 1.6
2nd quarter 2016 1st quarter 2016
In the survey, entrepreneurs are asked to indicate up to three items representing the main problems faced by their companies, so the sum of the percentages exceeds 100%.
5
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
EXPECTATIONS IN JULY 2016
More optimistic expectations The expectations indices are beginning to show signs that entrepreneurs are optimistic about the next six months. The index of expected demand hit the mark of 52.9 points in July and has been above 50 points for two consecutive months now, suggesting an expected increase in demand over the next six months.
At 50.8 points, the indicator has broken the 50-point dividing line for the first time since October 2014. Considering the margin of error of plus or minus one percentage point, we can say that entrepreneurs are no longer expecting to reduce their purchases of raw materials over the next six months.
The export expectation index hovered within the margin of error – down from 52.5 points in May to 51.8 points in June – and remains above the 50-point mark, indicating an expected increase in exports.
The employment expectation index, which has been growing since January, reached 46.3 points in July. The fact that the figure is below the 50-point mark still indicates an expected decline in jobs, but the index has been approaching that mark, suggesting that employment will likely fall at a slower pace.
The index of expected purchases of raw materials edged up by 2.3 points between June and July.
Expected number of employees Diffusion indices (0-100 points)
Increase 50 Decrease
48.2 46.3
JUL 2014
OCT
JAN 2015
APR
JUL
Expected number of employees
OCT
JAN 2016
APR
JUL
Dividing line
The indicators range from 0 to 100. Readings above 50 indicate an expected increase in number of employees.
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Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Investment intentions remain low A scenario of falling production and high industrial idleness has kept business investment intentions at low levels. The investment intentions index remained virtually unchanged from June to July, when it grew by 0.2 points to 41.4 points.
Investment intentions Diffusion indices (0-100 points)
65
60.9 60 55 50 45
41.4
40
NOV 2013
MAR 2014
JUL
NOV
MAR 2015
JUL
NOV
JUL
MAR 2016
The index ranges from 0 to 100 points. The higher the index, the more likely industry is to invest.
RESULTS Main problems GENERAL
SMALL
MEDIUM
LARGE
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
I 2016
II 2016
RANKING
High tax burden
45.1
44.9
1
46.7
46.1
1
46.6
47.3
1
43.5
43.1
2
Insufficient domestic demand
42.4
43.2
2
39.1
37.6
2
41.4
40.5
2
44.6
47.5
1
High interest rates
26.9
27.0
3
28.0
27.8
4
26.0
26.5
3
27.0
27.0
3
Client delinquency
24.9
25.2
4
30.7
31.1
3
27.3
25.5
4
20.7
22.1
6
Lack or high costs of raw materials
23.6
23.6
5
24.3
24.2
6
25.0
24.9
6
22.6
22.6
5
Lack of working capital
21.0
22.1
6
22.3
24.5
5
22.6
25.0
5
19.4
19.3
7
Exchange rate
20.0
18.2
7
10.0
7.2
13
16.4
12.3
9
26.8
26.8
4
Lack or high cost of energy
20.0
14.1
8
24.2
16.9
8
21.3
16.3
7
17.2
11.7
8
Unfair competition
12.7
13.1
9
18.6
18.4
7
12.6
15.5
8
9.9
9.2
11
Insufficient foreign demand
10.2
10.1
10
9.3
10.1
10
9.5
7.6
12
11.0
11.3
9
Lack of long-term funding
9.2
9.6
11
6.9
8.5
11
11.2
10.4
10
9.4
9.7
10
Excessive red tape
7.7
8.7
12
8.6
10.9
9
6.5
7.7
11
7.9
8.2
12
Difficulties with transportation logistics
5.4
6.7
13
4.5
6.1
14
5.3
6.6
14
5.9
7.1
13
Competition with imported goods
5.5
6.1
14
3.7
4.6
15
5.8
6.7
13
6.2
6.6
14
Lack or high cost of skilled labor
6.0
5.1
15
9.0
7.6
12
6.8
5.3
15
4.0
3.7
16
Legal uncertainty
4.0
4.0
16
4.9
3.6
16
4.3
4.4
16
3.3
4.0
15
Other
6.5
3.3
17
5.9
3.3
17
7.0
4.0
17
6.4
3.0
17
None
1.6
3.2
2.3
4.4
1.4
3.1
1.3
2.6
ITENS
7
Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Performance of industry NUMBER OF EMPLOYEES EVOLUTION
PRODUCTION EVOLUTION
Total
CAPACITY UTILIZATION (%)
ACTUAL-USUAL CAPACITY UTILIZATION
INVENTORIES LEVELS EVOLUTION
ACTUAL-PLANNED INVENTORIES
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
JUN 2015
MAY 2016
JUN 2016
40.3
45.5
46.6
40.7
43.7
44.6
65
64
64
33.8
35.1
36.1
52.1
48.9
47.8
53.1
49.8
49.3
BY INDUSTRIAL ACTIVITY Mining and quarrying
45.8
50.5
52.4
42.9
45.6
44.2
72
73
70
40.8
39.3
42.8
45.0
48.4
46.5
47.0
49.4
46.5
Manufacturing 45.3
46.3
47.2
40.6
43.6
44.6
65
64
64
33.4
34.9
35.9
52.4
48.8
47.9
53.4
49.8
49.4
BY COMPANY SIZE Small1
36.9
40.6
43.3
40.2
41.2
43.2
58
57
57
32.8
32.3
35.1
47.1
45.0
44.2
47.0
44.4
43.8
Medium2
39.6
44.4
45.8
40.3
43.1
43.7
63
62
62
32.7
34.6
35.4
50.8
48.7
47.5
52.0
48.6
48.4
Large3
42.3
48.5
48.6
41.2
45.3
45.7
70
69
69
34.8
36.7
37.0
55.2
51.0
49.8
56.8
53.1
52.6
The indicators vary in the 0-100 interval. Figures above 50 points suggest a positive evolution, higher-than-planned inventories or higher-than-usual capacity utilization. 1 Company with 10-49 employees. 2 - Company with 50-249 employees. 3 - Company with 250-plus employees.
Financial conditions in the quarter PROFITS
Total
AVERAGE PRICE OF RAW MATERIALS
FINANCIAL SITUATION
ACCESS TO CREDIT
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
II 2015
I 2016
II 2016
33.4
32.7
34.9
64.7
64.7
63.6
39.3
37.9
39.5
31.6
29.1
29.0
BY INDUSTRIAL ACTIVITY Mining and quarrying
37.2
31.5
37.0
59.1
60.4
58.2
42.0
31.4
38.5
34.2
33.0
32.9
Manufacturing
33.3
32.8
34.8
64.9
64.9
63.9
39.2
38.1
39.6
31.5
29.0
28.9
BY COMPANY SIZE Small1
30.3
28.7
31.2
65.9
66.3
64.6
33.8
32.5
34.3
30.6
26.6
25.9
Medium2
31.4
30.4
32.6
65.3
65.4
63.8
36.8
36.0
37.2
29.0
25.6
26.8
Large3
36.0
35.9
37.9
63.7
63.5
63.1
43.4
41.6
43.3
33.5
32.1
31.7
The indicators range in the 0-100 interval. Figures above 50 indicate satisfaction with profits and financial conditions, easier access to credit, or an increase in the average price of raw materials. 1 - Company with 10-49 employees. 2 - Company with 50-249 employees. 3 - Company with 250-plus employees.
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Industrial Survey ISSN 1676-0212 • Year 19 • Number 6 • June 2016
Industrial expectations DEMAND
Total
EXPORTS VOLUMES
PURCHASES OF RAW MATERIALS
NUMBER OF EMPLOYEES
INVESTMENT INTENTIONS*
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
JUL 2015
JUN 2016
JUL 2016
46.6
51.0
52.9
49.9
52.5
51.8
44.6
48.5
50.8
41.1
45.3
46.3
41.3
41.2
41.4
BY INDUSTRIAL ACTIVITY Mining and quarrying
47.3
50.2
48.4
47.6
52.4
50.7
44.1
45.3
44.9
41.5
43.6
42.8
49.2
43.6
42.0
Manufacturing
46.6
51.1
53.1
49.9
52.3
51.7
44.6
48.7
51.0
41.1
45.4
46.5
40.9
41.1
41.4
BY COMPANY SIZE Small1
45.3
47.2
50.9
45.3
46.3
49.1
43.6
45.2
48.5
41.0
42.9
45.2
32.3
29.9
30.5
Medium2
46.8
50.7
53.2
49.4
53.7
51.1
44.3
47.8
50.7
41.1
44.6
45.9
36.3
37.3
36.8
Large3
47.1
53.1
53.7
52.4
54.9
53.6
45.3
50.6
51.9
41.2
46.9
47.1
48.3
48.8
49.2
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 50-249 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 the Industrial Survey website
Sample profile: 2,589 enterprises, including 1,054 small, 946 medium and 589 large companies. Data collection period: July 1st - 13th, 2016.
INDUSTRIAL SURVEY | English version of “Sondagem Industrial Junho/2016” | 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, Flavia Coelho Branco Junqueira Ferraz, Aretha Silicia Lopez Soares, Roxana Rossy Campos e Taryane Carvalho Perné | CNI Publishing Center | Graphic design supervision: Carla Gadelha | Subscriptions: Customer Service - Phone: +55 (61) 3317-9989 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
