INDUSTRIAL SURVEY. Entrepreneurs show optimism in December. Expectations indices Diffusion index (0-100 points)*

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1 CNI Indicators INDUSTRIAL SURVEY Entrepreneurs show optimism in December The November issue of CNI s shows that industrial activity remains sluggish, with production and employment falling. While up from previous years, capacity utilization is still far from usual levels. On the positive side, inventory is very close to planned levels. Entrepreneurs, however, closed the year on an optimistic note. For the next six months, entrepreneurs expect to see an increase in demand, export volumes, purchases of raw materials and number of employees. Investment intentions are also on the rise. The outlook is more optimistic than at the end of. Expectations indices Diffusion index (0-100 points)* JAN MAR APR MAY JUN JUL AUG SEP OCT NOV Expected demand Expected exports Expected purchases of inputs and raw material Expected number of employees Dividing line * Figures above points indicate an expected increase. 1

2 PERFORMANCE OF INDUSTRY IN NOVEMBER Falling production and employment In November, the production index stood below the -point dividing line at 48.3 points, pointing to a decline in production. In November, the index had been slightly above the -point mark, but in the period, it stood well below that mark that is, production fell at a much stronger rate. The indicator of number of employees stood at 49.1 points in November, down from points in October. This is to say that industrial employment fell in November after holding steady in October. Production in November (2010-) Diffusion index (0-100 points)* Production Dividing line *Figures above points indicate a month-over-month increase in production. Capacity utilization remains at low levels The average capacity utilization rate held steady between October and November at 69%. The figure is higher than that registered in the last three years (up by one percentage point from and by three percentage points from 2015 and 2016), but lower than in previous years. The index measuring actual-usual capacity utilization fell by 2.4 points in November as compared to the month before to 43.5 points. The index is almost identical (down by 0.1 point) to the figure recorded in November. Capacity utilization is still a far cry from the -point dividing line, which means that industrial activity for November is below usual levels for industry. 2

3 Average capacity utilization rate Percentage (%) % Nov/ JAN MAR APR MAY JUN JUL AUG SEP OCT NOV Inventory close to planned levels The inventory index amounted to 48.4 points, showing a decline in inventory levels. The index measuring actual-planned inventory levels moved closer to the dividing line as it dropped from.8 points to.2 points, showing that inventory is now very close to planned levels. Inventory levels and actual-planned inventory levels Diffusion index (0-100 points)* 54.5 / above planned level / under planned level NOV JAN MAR APR MAY JUN JUL AUG SEP OCT NOV Evolution Dividing line Actual-planned * Figures above points indicate an increase in inventory levels or that actual inventory is above planned levels. 3

4 INDUSTRY S EXPECTATIONS IN EMBER Entrepreneurs expectations increase again The expectation indices increased for the second consecutive month in December and closed the year above the -point mark, suggesting optimism among entrepreneurs. Compared with December, most indexes posted growth, except for the indicator of export volumes, which is down by 0.3 points on this comparison basis. The other indices are up by 3 points or more on a 12-month basis. Expectations indices Diffusion indices (0-100 points)* Demand Purchases of inputs and raw materials APR JUN AUG OCT APR JUN AUG OCT Expected demand Dividing line Expected purchases of inputs and raw materials Dividing line Number of employees Exports APR JUN AUG OCT APR JUN AUG OCT Expected number of employees Dividing line Expected exports Dividing line * The indices vary in the interval. Figures above points indicate an expected growth. 4

5 Investment intentions keep increasing The investment intentions index increased by 0.5 points as compared to November to 55.5 points, marking the third consecutive monthly increase in the indicator. The index is 3.3 points higher than the figure registered in December and reached its highest level since April 2014, when it hit the mark of 57.7 points. Investment intentions Diffusion indices (0-100 points)* APR 2016 AUG APR AUG APR AUG * The higher the index, the more likely industry is to invest. RESULTS BY INDUSTRIAL ACTIVITY AND COMPANY SIZE Performance of industry PRODUCTION EVOLUTION NUMBER OF EMPLOYEES EVOLUTION CAPACITY UTILIZATION (%) ACTUAL-USUAL CAPACITY UTILIZATION INVENTORIES LEVELS EVOLUTION ACTUAL-PLANNED INVENTORIES Nov/17 Oct/18 Nov/18 Nov/17 Oct/18 Nov/18 Nov/17 Oct/18 Nov/18 Nov/17 Oct/18 Nov/18 Nov/17 Oct/18 Nov/18 Nov/17 Oct/18 Nov/18 Total Mining and quarrying BY INDUSTRIAL ACTIVITY Manufacturing BY COMPANY SIZE Small Medium Large The indicators vary in the interval. Figures above points indicate positive evolution, higher-than-planned inventory levels, or higher-than-usual capacity utilization. 1 - Company with 10 to 49 employees. 2 - Company with to 249 employees. 3 - Company with 2-plus employees. 5

6 Industrial Expectations DEMAND EXPORTS VOLUMES PURCHASES OF RAW MATERIALS NUMBER OF EMPLOYEES INVESTMENT INTENTIONS* Dec/17 Nov/18 Dec/18 Dec/17 Nov/18 Dec/18 Dec/17 Nov/18 Dec/18 Dec/17 Nov/18 Dec/18 Dec/17 Nov/18 Dec/18 Total Mining and quarrying BY INDUSTRIAL ACTIVITY Manufacturing BY COMPANY SIZE Small Medium Large The indicators vary in the interval. Figures above points indicate positive expectations. * The indicator varies in the interval. The higher the index, the more likely industry is to invest. 1 - Company with 10 to 49 employees. 2 - Company with to 249 employees. 3 - Company with 2-plus employees. Technical specifications Sample profile: 1,961 enterprises, including 813 small, 699 medium and 449 large companies. Data collection period: December 3-12,. i Learn more For more information on the survey, including historical series and methodology, kindly visit: INDUSTRIAL SURVEY English version of Sondagem Industrial Novembro Monthly Publication of the National Confederation of Industry - CNI Policy and Strategy Unit - DIRPE Economic Policy Unit - PEC Executive manager: Flávio Castelo Branco Research and Competitiveness Unit - GPC Executive manager: Renato da Fonseca Statistics Unit Manager: Edson Velloso Team: Marcelo Souza Azevedo, Aretha Silicia Lopez Soares and Roxana Rossy Campos Editing Unit Coordinator: Carla Gadelha Graphic design: Simone Marcia Broch Subscriptions: Customer Service - Phone: +55 (61) sac@cni.com.br This publication may be copied, provided that the source is mentioned.