Wholesale sector predicts fall 2.5% real revenue in 2017, says Abad

SAO PAULO (Reuters)-the wholesaler sector of the country must close until 2017 with an actual fall in turnover, 2,5% after review of expectations, said on Monday the Brazilian Association of wholesalers and distributors of industrial products (Abad).
The negative estimate comes after the fall of 1,57% in the wholesale billing in the first half, compared with same period of the previous year, according to ABAD/FIA-USP.
"This drop is perhaps not only due to a change of brands or even a reduction of business in the sector, but deflation itself is somehow impacting those numbers," said the President of Abad, Emerson Luiz Destro, in São Paulo.
According to Swift, the fall in inflation also undermined the competitiveness of some companies, which often buy products at higher prices than competitors who replenish their stocks later.
The negative situation also translates in 4,9% increase in defaults from wholesalers in June compared to same month of the previous year, to 19,2%, according to a survey published by Serasa Experian at the event.
However, the sector betting on gradual upturn, due to better macroeconomic perspective and seasonal factors like the holidays and the release of the thirteenth salary.
Another point that collaborates to the thesis of resumption is 7,2% reduction in defaults of retailers in the first half, compared with the same stage of 2016, recorded by Serasa.
"It is also good news, besides the economic (...) that really the trend of improvement is there, "said Paul Manuel, Director of institutional relations of the Serasa Experian.
The resumption of the political stability and the continuity of the reforms proposed by the Government of President Michel Temer, like welfare, also boost the confidence of the industry in a trend of improvement in growth for the next 12 months.
"We believe that with these structural reforms, if they continue to happen, whether it''s reducing interest rates on pension reform and even a minirreforma tax, that will bring a greater level of confidence for traders," said Swift.