Industrial Costs Indicator 1.1 Percent Higher in Second Quarter 2019 Than in First

RIO DE JANEIRO, BRAZIL – Compared to the same quarter last year, industrial costs increased by 3.5 percent, according to a study released yesterday, October 4th, by
the National Confederation of Industry (CNI).

Energy costs, which have been rising since the end of 2016, increased 2.1 percent in the second quarter compared to the first quarter this year, in the seasonally adjusted series.

The increase in energy was driven by the 5.1 percent increase in fuel oil and 1.3 percent in electricity. Personnel costs rose by 1.1 percent. Intermediate goods rose 1.7 percent.

According to the CNI study, tax costs decreased by 0.6 percent and working capital costs fell by 3.7 percent.

Prices

Over the same period in which industrial costs rose 1.1 percent, the prices of industrialized products in the domestic market increased by 2 percent, suggesting an increase in corporate profits.

In addition, the increase in industrial costs was lower than the 5.4 percent rise in prices in
Brazilian reais of manufactured goods in the United States, which improved the competitiveness of Brazilian products in foreign markets.

“Despite the gain in competitiveness in foreign markets, Brazilian industry lost competitiveness in the domestic market, because the price of imported manufactured goods, in Brazilian reais, grew 0.6 percent, less than the 1.1 percent increase in industrial costs of Brazilian companies,” says the CNI study.

Source: Agência Brasil

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