BRASILIA--Brazil's use of installed industrial capacity held steady in August, despite signs of an incipient recovery in other indicators, the country's National Confederation of Industries, or CNI, said Thursday.
The group reported utilization of industrial capacity remained unchanged from July on a seasonally adjusted basis at 80.9%.
The result, however, was down from 82.2% in August 2011. The CNI said steady use of capacity reported in August came alongside a strong increase in industrial sales, which rose 4.8% from July and 7.0% from August 2007.
Industrial hours worked were also up 0.7% during the month, though net industrial employment slipped by 0.3%. CNI officials said the favorable reaction of industrial sales during the month offered a sign that the country's manufacturing sector had begun to resume growth after a period of stagnation early in the year.
"The latest data shows positive signs," said CNI chief economist Flavio Castelo Branco, "The main highlight is that the growth of activity continues, though it hasn't yet been reflected in use of industrial capacity."
Brazil's government has offered more than 14 billion Brazilian reais ($7 billion) in tax reductions to local industry this year in an effort to spur increased consumption and investment.
The recent increase of industrial sales also comes in the wake of the Brazilian central bank's move to cut the country's benchmark Selic interest rate by 5 percentage points over the past 12 months to a record low of 7.5%.
"We expect some continued reaction ahead to stimulus offered in recent months, especially in the durable goods and auto sectors," said Mr. Castelo-Branco.
But despite the intense fiscal and monetary stimulus, the local economy is expected to show a strong recovery only in the coming year.
According to the CNI's projections and recent market projections, the country's economy is expected to grow by only about 1.5% this year after a 2.7% expansion in 2011.
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The group reported utilization of industrial capacity remained unchanged from July on a seasonally adjusted basis at 80.9%.
The result, however, was down from 82.2% in August 2011. The CNI said steady use of capacity reported in August came alongside a strong increase in industrial sales, which rose 4.8% from July and 7.0% from August 2007.
Industrial hours worked were also up 0.7% during the month, though net industrial employment slipped by 0.3%. CNI officials said the favorable reaction of industrial sales during the month offered a sign that the country's manufacturing sector had begun to resume growth after a period of stagnation early in the year.
"The latest data shows positive signs," said CNI chief economist Flavio Castelo Branco, "The main highlight is that the growth of activity continues, though it hasn't yet been reflected in use of industrial capacity."
Brazil's government has offered more than 14 billion Brazilian reais ($7 billion) in tax reductions to local industry this year in an effort to spur increased consumption and investment.
The recent increase of industrial sales also comes in the wake of the Brazilian central bank's move to cut the country's benchmark Selic interest rate by 5 percentage points over the past 12 months to a record low of 7.5%.
"We expect some continued reaction ahead to stimulus offered in recent months, especially in the durable goods and auto sectors," said Mr. Castelo-Branco.
But despite the intense fiscal and monetary stimulus, the local economy is expected to show a strong recovery only in the coming year.
According to the CNI's projections and recent market projections, the country's economy is expected to grow by only about 1.5% this year after a 2.7% expansion in 2011.
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