The downward movement was caused by the decline in 2 of the 3 components of the ICI: the cost of production and the cost of capital.
O ICI(Industrial Cost Indicator), which measures the costs of the Brazilian manufacturing industry, recorded a 1% drop in the 1st quarter of 2024 compared to the previous quarter. The indicator is at 28.8%. Here’s the full (567 kB).
The indicator fell again after registering an advance in the 4th quarter of 2023. According to the CNI (National Confederation of Industry), the downward movement was caused by the decline of 2 of the 3 components of the ICI: the cost of production, which fell 1.4%; and the cost of capital, which fell 2%.
“The drop is positive, as it means less costs for business owners in the manufacturing industry. But, when compared to the first quarter of 2020, industrial entrepreneurs still face a scenario of high costs to retain professionals, to obtain working capital and to continue producing”, it says CNI economist, Paula Verlangeiro.
Capital cost
The capital cost index fell by 2% in the 1st quarter of 2024 and, as a result, the indicator recorded a fall by 4º quarter in a row. According to the CNI, the result is a reflection of the decline in the basic interest rate, Selic.
Personnel costs
The index that measures the cost of industrial production fell 1.4%, after having shown an increase in the 4th quarter of 2023. The personnel cost component fell 3.5%. According to the CNI, the decrease was driven by the 3% drop in the wage bill at the beginning of the year, while employment increased 0.5% in the 1st quarter.
The costs of intermediate goods fell by 1% due to the fall, of the same magnitude, in both the cost of national intermediate goods and the cost of imported intermediate goods.
O Energy costs were the only ones that rose in the quarter, with a 2.1% increase. There was also a 3.1% increase in electricity costs, a 0.6% increase in fuel oil costs and a 2% increase in natural gas costs.
Tax cost
The sum of federal and state taxes paid by industry divided by industrial GDP increased 1.7% in the 1st quarter of 2024 compared to the 4th quarter of 2023.
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