Brazilian machinery and equipment industry lowers expectations for 2023

Brazilian machinery and equipment factories experienced another decline in domestic sales in October compared to the previous year, reinforcing a trend that marked the entire year of 2023. Within ten months, Abimaq, the entity representing the sector, once again revised its estimates for 2023 downward, which, at the beginning of the year, denoted growth. The current expectation is a decline of 8.2% in total revenue and 12.2% in domestic turnover. The year’s output is expected to be 6.8% lower than in 2022. Last year, the sector saw a 6.9% decrease in total revenue compared to 2021.

According to data released this Wednesday (29) by the association, domestic revenue last month totaled R$ 16.6 billion, a 21.4% decrease compared to the previous year. As a result, the sector has seen a 14.7% decline year-to-date over the past ten months to R$ 183.5 billion.

The result is less bleak when analyzing the total revenue because the foreign market has been the sector’s escape valve. Total revenue in October was R$ 23.8 billion, a 12.1% reduction from the same month last year. Year-to-date, revenue reached R$ 243.4 billion, a 9.8% decrease.

Exports are practically the only positive economic indicator for Abimaq in October and the year. The sector exported US$ 1.42 billion last month, a 28.8% increase compared to the previous year. Shipments reached US$ 11.86 billion in the first ten months of 2023, a growth of 18.4% over the same period in 2022.

The chart below shows exports from the Brazilian machinery sector between Jan 2019 and Sep 2023. The data is from DataLiner.

Brazilian Machinery Industry Exports | Jan 2019 – Sep 2023 | TEU

Source: DataLiner (click here to request a demo)

“It should be the best historical performance of the sector in exports, surpassing 2012 when US$ 12.3 billion was exported. The expectation is to end the year with US$ 14 billion in exports,” said Cristina Zanella, a director at Abimaq. According to the association, export revenues are expected to grow by 15.5% for the year.

Imports of machinery and equipment lost momentum in October but remain strong in 2023. Last month, they amounted to US$ 2.1 billion, a 6% decrease compared to October 2022. Year-to-date, they increased 9.4%, reaching US$ 22.36 billion. The sector’s trade balance in 2023 is stable, with a 0.7% increase. It marks a deficit of US$ 10.5 billion, with US$ 638 million in October alone.

Soure: Valor Econômico

Click here to access the original article in Portuguese: https://valor.globo.com/empresas/noticia/2023/11/29/abimaq-rev-para-baixo-estimativas-para-2023.ghtml

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