Machinery Exports Plummet by 23% Due to Decline in Argentine Trade, Says Abimaq

Machinery and equipment manufacturers in Brazil experienced a significant decline in exports in February, as revealed in data released this Wednesday afternoon (27) by Abimaq, the sector’s representative association. Last month, foreign trade amounted to US$829.4 million, marking a 23.2% decrease compared to February 2023 and a 21.4% decline from January. Year-to-date, the sector has faced a revenue loss of 9.2%, with US$1.9 billion generated during this period.

The primary factor contributing to this sluggish start in machinery and equipment shipments this year is the decrease in business with Argentina. Given its substantial role in South American trade, sales to the region dropped by 23.4% in the first two months. Additionally, Bolivia encountered difficulties due to a shortage of dollars to finalize transactions, according to the association.

Abimaq emphasizes the impact of February’s carnival season, which typically reduces working days, suggesting that the downturn in the foreign market observed at the start of the year may not persist. Expectations are for exports to rebound in March. Looking at a broader timeframe, over the past 12 months, exports have grown by 8.7%, totaling US$13.8 billion.

The following chart shows the twenty-foot container equivalent volume of Brazil’s machinery exports (hs 84) between Jan 2022 and Jan 2024. The data is from DataLiner.

Machinery Exports | Jan 2022 – Jan 2024 | TEU

Source: DataLiner (click here to request a demo)

Conversely, imports continue to rise, reaching US$2.1 billion in February, reflecting a 12.4% increase compared to the previous year. Year-to-date, imports have grown by 9.7%, totaling US$4.4 billion. Consequently, the sector’s trade balance shows a deficit of US$2.5 billion over the two-month period, a 29.6% increase compared to the same period in 2023.

The sector’s performance in the domestic market also saw a sluggish start to the year. In February, domestic net revenue amounted to R$15.1 billion, marking a 9% decrease compared to the same month in 2023. Over the two months, sales to the domestic market dropped by 18%, generating R$26.4 billion in revenue.

Total revenue in February reached R$19.2 billion, down 14% year-on-year. Over the first two months of the year, the reduction amounted to 17.5%, with total revenue reaching R$35.7 billion. The beginning of 2024 maintains the subdued pace of business seen in the last two years. Since 2022, the sector has been experiencing poor performance, with a 6.9% decline compared to 2021. In 2023, total revenue was 15.4% lower than the previous year.

Source: Valor Econômico
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