Machinery sector in Brazil sees revenue drop as import share grows

Machinery industry sales in June saw another month of decline compared to the same period last year, reflecting a drop in investment in capital goods in Brazil, an increase in imports, and lower sector exports.

Total net revenue, which includes both domestic sales and shipments abroad, fell by 9.6%, totaling R$23.16 billion, according to a report released Wednesday by Abimaq, the entity representing machinery and equipment manufacturers. This decline is attributed to a 10.8% drop in domestic sales, which stood at R$18.19 billion, and an 11.6% drop in exports, valued at US$922 million.

Despite a 2.7% drop in machinery consumption in Brazil, totaling R$31.2 billion in June, imports increased by 3.1% year-on-year, reaching US$2.31 billion last month.

According to Abimaq, imports continue to gain ground in the Brazilian market, accounting for 45.2% of all machinery purchased in Brazil in the first half of the year. A year ago, the share of imported goods was 39.8%. The entity highlights an increase in imports by consumer goods manufacturers, including the food industry.

China, the main source of imported machinery, now accounts for 28.5% of imports into the country, 4 percentage points above the level of the same period last year. This marks China’s highest level of total imports of mechanical capital goods in the historical series that began in 2007 when China’s share was only 6.9%.

As a result, the machinery and equipment industry ended the first half of the year with a 16.4% drop in sales, totaling R$122.9 billion in domestic sales and exports over six months. Domestic sales saw a 17.8% decline, falling to R$91.9 billion during the same period. Exports decreased by 9.1%, totaling US$6 billion. Conversely, imports, which totaled US$14.16 billion from January to June, rose by 6.5%.

Month-on-month—from May to June—the sector showed more positive results, with a 10.4% growth in total net revenue despite a 12.3% decline in exports. Apparent machinery consumption in Brazil rose by 6.6% in the comparison between June and May, while imports fell by 9.3% last month.

Source: Folha Vitória

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