Drop in industrial production was less intense in May, says CNI survey

The industry continues to feel the effects of the pandemic of the new coronavirus, but in May, the drop in production was less intense and less widespread than in April. The information was released by the National Confederation of Industry (CNI) on Friday (19). According to the Industrial Survey, the rate of production evolution stood at 43.1 points last month, against 26 points in April. The survey was conducted with 1,859 companies in the sector, from June 1 to 10. Values below 50 points indicate a drop in production compared to the previous month. The farther away from the 50 points, the greater and more widespread the fall. According to CNI, the biofuels, cleaning products, perfumery and personal hygiene sectors, and pharmaceuticals increased production in May. On the other hand, the printing and reproduction sectors of recordings, leathers and artifacts of leather, footwear and their parts, and clothing and accessories continue with the worst performance. The number of employees improved in May reaching 42 points, against 38.2 points in April. As follows below 50 points, however, it still indicates a drop. "It is noteworthy that it is the second worst variation recorded in May, behind only the year 2015, when the index reached 41.4 points," cni reported. The research shows that the level of use of production capacity of the Brazilian industry also rose last month, reaching 55%, against 49% in April. "Despite the increase, the percentage is the second lowest for the entire historical series, which began in 2011, and is 12 percentage points below the level recorded in the same period of 2019," he added. According to the survey, the inventory evolution index stood at 46.2 points, "pointing to a reduction in inventories". The effective stock level index in relation to the planned stood at 47.4 points. According to cni, the figures show that inventories are at a lower level than anticipated by the industry. The survey conducted in June shows a 13.6-point increase in the demand expectation index of industrial entrepreneurs compared to the previous survey. At 48.7 points this month, the index approaches the 50-point dividing line, which separates prospects of falling from high demand in the next six months. "The feeling of strong pessimism, observed in the previous two months, decreased both in terms of its dissemination and intensity. All expectation rates remain below the dividing line, but showed significant improvement in June," cni said. The index of intention to invest rose 4.5 percentage points in June to 41.4 points. Despite the growth, the CNI said, it is still at a "low level, reflecting the pessimism of industrial entrepreneurs." The June result of the intention to invest is 17.8 points below that recorded in January 2020, 10.9 points lower than that recorded in June 2019 and 8 points below its historical average.