Brazil’s machinery and equipment sector exports surge 24.2% in March

Brazil’s machinery and equipment industry saw year-on-year growth of 24.2% in exports in March. The industry’s performance exceeded expectations and helped alleviate the 5.5% drop in revenue gained in the domestic market.

Despite the satisfactory export numbers, which grew cumulatively 28.7% from January to March, the sector ended the first quarter with a 4.6% lower total sales revenue. “The good performance of exports was not enough to sustain positive revenue results in first-quarter of the year,” emphasized Cristina Zanella, Director of Competitiveness, Economics, and Statistics at the Brazilian Association of Machinery and Equipment Industries (Abimaq).

The contractionary monetary policy has been harming the activities of many sectors, but mainly those that are credit-dependent. As a result, Brazil has seen an almost generalized decrease in machinery and equipment sales in the domestic market.

“Our expectation is for a performance similar to that observed in 2022 regarding investments in the country, but we still have obstacles preventing this scenario. We have not even had a signal for a reduction in the base interest rate. Producers who depend on credit for investment financing do not pay less than 20% per year,” comments Zanella.

Please see below a chart displaying Brazil’s exports of machinery and equipment (hs codes 84-86), in containers, between Jan 2020 and Mar 2023. The data is from DataLiner.

Exports of machinery and equipment | Jan 2020 – Mar 2023 | TEU

Source: DataLiner (click here to request a demo)

Apparent consumption

The apparent consumption of machinery and equipment – the result of the sum of production directed to the domestic market with imports – recorded a seasonally adjusted growth of 6.5% in March compared to February. Despite this growth, machinery consumption was 1.4% lower than the result observed in the same month of 2022. In the first quarter of 2023, investments in machinery and equipment decreased by 8.0%.

The period saw a decrease in machinery and equipment imports, measured in reais, by 4.3% and a reduction of 10.3% in the sale of national products in the domestic market. This led to a decline of almost two percentage points of local products in the national machinery and equipment market share.

Source: Comex do Brasil

To read the full original article, please see: https://www.comexdobrasil.com/exportacao-de-maquinas-e-equipamentos-registra-crescimento-de-242-em-marco-no-1o-trimestre-queda-de-46

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