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July 27, 2022
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Difficulty in accessing inputs affects 22 out of 25 industry sectors

BC: economy declines almost 1% in January

The war in Ukraine and the lockdowns in industrial regions of China are prolonging a problem that began with the covid-19 pandemic, in 2020. Industry (CNI).Difficulty in accessing inputs affects 22 out of 25 industry sectors

According to the CNI, for eight consecutive quarters, industries have cited the difficulty of accessing raw materials as the main problem. In the second quarter of this year, the sector most affected was the printing and reproduction industries, with 71.7% of companies citing the problem. Then come the cleaning, perfumery and personal hygiene sectors (70%) and automotive vehicle industries (69.8%).

Only three industry segments did not mention shortages or high prices of raw materials as the main problem. Among the leather and leather goods industries, the problem appeared in third place, cited by 37.2% of the companies interviewed. In the furniture (38.7%) and maintenance and repair (45.5%) segments, the problem ranked second on the list.

For CNI economist Paula Verlangeiro, about half of industrial production is consumed as an input by the industry itself. In this way, the scarcity or high prices of inputs do not only affect the manufacturers and spread through the production chain, reaching the consumer through price increases or a drop in production.

According to the economist, the bottlenecks in the logistics and production chain caused by the covid-19 pandemic, which persisted since the end of 2020, were worsened this year with the war between Russia and Ukraine and the severe lockdowns in China. These last two factors delayed the normalization of global input chains, which had not yet recovered from the pandemic.

The survey also reveals that entrepreneurs believe that the situation will return to normal only in 2023. “In view of this, the main consequences are difficulties in recovering – or maintaining – production, the increase in input prices and costs in production chains , in addition to the readjustments in the prices of consumer goods and the greater pressure on inflation”, explains the CNI economist.

high interest

In addition to the bottlenecks in access to raw materials, the CNI survey revealed that the rise in interest rates worries the Brazilian industry. According to the survey, 16 of the 25 of the sectors analyzed consider the recent increases in the Selic rate (basic interest rates in the Brazilian economy) as one of the five main economic problems.

To curb inflation, the Central Bank raised the Selic rate from 2% per year in August 2020 to 13.25% per year today. In the assessment of the CNI, the increase is excessive and harms production, consumption and employment, by making credit more expensive.

According to the CNI, the concern with the interest rate has been growing for five consecutive semesters, being increasingly cited by industrial entrepreneurs. In the division by sectors, the segments of various products and automotive vehicles mentioned the Selic as the second biggest current problem. In the sectors of food, wood, machinery and equipment, electrical materials, metallurgy, textiles and clothing and accessories, the item ranks third.

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