BRAZIL-2015 Industrial output

The misery continues!

Brazil’s industrial output fell 8.3% in 2015 and industrial employment fell for the 50th consecutive month. It’s the largest output decline since 2003. The decline affected 68% of all sectors consulted and output ranging from “essentials” such as food and “superfluous” products (I don’t know what are superfluous products – some say alcoholic beverages and I disagree!)

 Excess capacity in industry is estimated at 50%.

The government also announced tax increases and a switch from tax on weight to an ad valorem tax basis. The increases will apply to chocolate products, cigarettes, ice cream and pet food (which my dog does notconsider “superfluous”!)

The data suggest that the recent growth of industrial exports is due exclusively to the devaluation of the Real and not to any structural changes in the sector (e.g. productivity, technology, etc.)

Not good!