The October-November 2013 edition of the Investment Survey by the Getulio Vargas Foundation has obtained data from Brazilian industrial companies on the development in 2013 and expectations for 2014 regarding variables such as investment, employed personnel and sales. 758 companies were consulted, responsible for sales of R$ 534 billion.
ASSESSMENTS REGARDING 2013
The profile of the assessments for 2013 was relatively similar to those undertaken at the end of last year, for 2012. For investments in fixed capital, the share of companies that increased the spending on machinery and equipment decreased to 40% in 2013 from 43% in 2012; in contrast there was a drop to 25% from 28% in the same periods, in the proportion of companies reporting a reduction of investments.
Regarding employed personnel, the proportion of companies indicating increase in the current year decreased to 36% in 2013 from 37% in 2012; of those that dropped the manpower decreased to 20% from 23% respectively. The assessments on the evolution of actual income were more favorable: 58% of companies indicated sales growth in 2013, an increase of four percentage points (pp) compared to last year; following the same optimistic behavior, there was a decrease of 4 pp in the proportion of companies reporting reduced revenues between 2012 and 2013, to 20% from 24%.
PREDICTIONS FOR 2014
Despite the good performance of the industry in the first half, the worsening of the business environment in this second half seems to have influenced the predictions for 2014, less favorable than those made last year (for 2013) in the items of Investments and Income. Regarding Employment, forecasts for 2014 are similar to those made in October-November last year for the following year.
Regarding investments in fixed capital, 47% of companies intend to expand them in 2014, versus 50% that predicted the same in October-November last year. The portion of those that project a decrease in investments increased to 19% from 15% in the same period.
Forecasts for the evolution of investments in the coming year were also performed quantitatively, being framed in growth (or reduction) ranges. Among the companies that project to invest more, the most cited range was that of growth, between 5.1% and 10%, reported by 34% of companies (32% in 2013). Growth between 10.1% and 20% was predicted by 29% of respondents (26% in 2013); whereas 22% predict to grow more than 20%, 4 pp lower than the proportion of the previous year; and 15% of companies have chosen the growth range between 0.1% and 5%, compared to 16% last year.
Expectations regarding the hiring by the industry in 2014 are very similar to those in October-November last year: the share of companies predicting increased total employed personnel stood at 32% and those that project a reduction in the quota of manpower decreased to 11% from 12%.
Regarding income, forecasts for 2014 are less favorable than those made in the past year. The proportion of companies that predict actual sales growth in the next year decreased to 64% for 2014 from 71% in the forecasts for 2013. The portion of companies that intend to earn less in the coming year increased to 8% from 6%.
Among the companies that project revenue growth, 41% believe in a growth rate in the range between 5.1 and 10%, versus 44% last year. Then there is the growth range between 10.1 and 20%, predicted for 28% of companies, the same result of 2013. Growth between 0.1% and 5% was predicted by 21% of companies (17% in 2013); and 10% project to grow more than 20%, a proportion below that recorded in the previous year (11%).