The economy is not just about numbers. It’s made of people. Currency exchange rates, interest rates, inflation rates and all the statistics that make up the news directly affect the lives of the population and, above all, the business environment for companies. And companies are run by people, and they employ people. It is in this gear that there is a warning sign. In January, automakers had their worst month in 19 years. In the food sector, domestic consumption is 12% below the same period last year. The textile sector, which plummeted 14.5% last year, should close 2022 at or close to zero, according to the president of the Brazilian Textile and Apparel Industry Association (Abit), Fernando Pimentel.
There is no denying that the Brazilian industry is on the rocks. A study by consultancy Deloitte found that three out of five entrepreneurs and executives will remain cautious about investments and expansion initiatives in 2022. After the elections, they may return to invest.
The turbulent environment affects mood. The pandemic has spread uncertainty and industry confidence in Brazil started 2022 at its lowest level since mid-2020, with the sixth consecutive monthly decline in January, according to data from Fundação Getulio Vargas (FGV).
The numbers show that the Industry Confidence Index (ICI) lost 1.7 points in the month, to 98.4 points, the lowest since July 2020 (89.8). On a downward trajectory since August last year, the ICI recorded in January its longest streak of losses since 2014, when eight consecutive months of retraction were recorded.
The escalation of uncertainties is mainly the result of the recipe for a new surge in deaths in the pandemic. This is more than clear in the numbers. The Current Situation Index (ISA), which measures the sentiment of entrepreneurs about the present moment of the industrial sector, dropped 1.2 point in January, to 99.8 points, the lowest since August 2020 (97.8), according to the FGV. The Expectations Index (IE), an indicator of the perception of the coming months, dropped 2 points, to 97.1 points, the lowest level since April 2021 (96.9).
Despite the numbers showing an unfavorable situation, Minister Paulo Guedes tries to overcome the crisis by shouting, with a speech that escapes reality. For Guedes, Brazil came back from the V-shaped pandemic crisis, preserved 11 million jobs in the private sector and protected 68 million Brazilians. But the fact is that, in the third year of government, he was unable to carry out any reforms.
Outside the rhetoric of economic denialism are situational realists. One of the leading authorities in the productive sector, the president of the National Confederation of Industry (CNI), Robson de Andrade, is convinced that Brazil will not grow more than 3% a year in a sustained manner without a strong, competitive, sustainable and internationalized. For this, reforms will have to be carried out. Or we will continue to believe that all is well, while the industry dies.
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