Pandemic still affects offer and supply costs for industry

The main problem facing firms in the second quarter of 2021 was still a shortage in raw materials and the increase in their costs. According to the study Industrial Survey, by Brazil’s National Confederation of Industry (CNI), these effects of the COVID-19 pandemic were mentioned by 68.3 percent of the companies surveyed.

Next come high tax burden (34.9%) and the exchange rate (23.2%) among the main setbacks challenging the sector in the country.

The research shows that the hike in raw material prices persists, though at a slower pace. The rate sank in the April–July quarter, but is still above the 50 point line and among the highest in the time series, with 74.1 points. Indicators below 50 signal prices below the expected. When above this amount, they are above the expected.

In June, the indicator for effective stock stood at 48.7 points, which means stocks are nearly in line with business plans. The distance from the expected was more significant in June if compared to the months of April and May, when rates were 49.6 and 49.2 points, respectively.

Employment and production

The CNI study found that employment has faced no decline for a year now. The indicator for employees in industry when up to 52 points in June. For the second month in a row, the number of workers is above the 50 point line. In other words, it shows an increase in employment.

Industrial output also grew for the second consecutive month. The rate stood at 52 points. Indices vary from zero to 100, with 50 as the defining threshold. Figures above this value indicate growth from the previous month; those below, a reduction.

Furthermore, the use of installed capacity (UCI in the original) reached 71 percent in June, up one percentage point from May. This percentage has been reported higher for June since 2013, and shows that industry, despite the fall reported early in the year, is now warming up.