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With growth of 2,9% in the second quarter, the Brazilian manufacturing sector gains strength and surpasses major global economies.
A Industry of Brazil launched a demonstration of its recovery capacity by rising to 40th position in the Ranking of industrial production, which includes 116 countries. The survey, released by the Institute for Studies on Industrial Development (Iedi) and based on data from the United Nations Industrial Development Organization (Unido), revealed that the country registered a growth of 2,9% in the second quarter of 2024, compared to the same period in 2023. This advance is significant, considering that Brazil occupied the 70th position in the previous year, an improvement of 30 places in just 12 months.
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This result was driven mainly by the dynamism of the consolidated goods industry , a sector that benefited from the reduction in the basic interest rate (Selic) at the beginning of 2024. The drop in interest rates facilitated credit, especially for the consumption of vehicles and real estate, two sectors that had a large share in industrial growth. Rafael Cagnin , chief economist at Iedi, explains that, in addition to this factor, the country's economic recovery was also reinforced by other elements: “There is a real gain in family income, an improvement in employment conditions and initiatives such as the readjustment of the minimum wage and the expansion of social programs such as Bolsa Família.”
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International comparisons: Brazil stands out in Latin America and beyond
The performance of Industry of Brazil in the second quarter of 2024 not only secured a prominent position in the global ranking, but also surpassed several major economies. Brazil performed better than important Latin American economies such as Chile (-0,6%, in 71st), Mexico (-1%, in 75th) and Argentina , which showed a drastic drop of 17,1%, placing it in second-to-last place in the ranking. This Argentine result was only surpassed by Palestine, which reduced its industrial production by 28,5% amid conflicts in the region.
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In global terms, the Brazilian manufacturing industry has also left behind giants such as United States (-0,1%), United Kingdom (-0,5%), France (-1,5%) And Japan (-2,9%). This shows that, despite the difficulties faced in recent years, Brazil has managed to resume growth in a global context of economic challenges.
Iedi also highlighted the economies that led the industrial growth ranking in the second quarter of 2024, such as Trinidad and Tobago , which recorded an impressive growth of 82,9%, followed by Armenia (42,3%), Rwanda (21,5% ). %), Kuwait (16,6%) and Taiwan (15%).
Impacts on GDP and expectations for the future
The growth of the manufacturing industry is seen as an important driver for the Brazilian economy in 2024. Claudio Considers , coordinator of the National Accounts Center of the Brazilian Institute of Economics (FGV/Ibre), highlighted that the industrial sector contributed to the 2% growth of Gross Domestic Product (GDP) accumulated over the last 12 months, with an increase of 1,9% in the manufacturing industry alone.
“We are seeing strong demand for consolidated goods, which is being driven by the increased availability of consumer credit due to the reduction in interest rates. In addition, factors such as the export of vehicles to the Argentina and the increase in exports of products from industries has helped to maintain this growth rate”, he considers. He also highlighted that investments in machinery and equipment in Brazil have been a positive sign of confidence in the sector.
Despite the good results, there are uncertainties on the horizon. The central bank began, in September 2024, a new cycle of increases in the Selic rate, which may impact domestic demand and slow down the consumption of goods resolved in the coming months. In addition, international trade negotiations, particularly between the United States , Europe e China , put the competitiveness of Brazilian products into practice, especially in the international market.
Brazilian industry: the path to global competitiveness
According to Iedi, the growth of Industry of Brazil closely follows the world average, which was 2,5% in the second quarter of 2024 compared to the same period in 2023. The Brazilian manufacturing industry grew 2,9%, a performance that still places the country in a prominent position on the global stage. In the accumulated first half of 2024, Brazil registered an increase of 2,3%, compared to global growth of 2%.
Rafael Cagnin also warned of future risks, despite the good results so far. The increase in interest rates and trade barriers imposed by Western countries on China could intensify competition with Chinese products, both in the domestic and international markets. “It is a challenging scenario. The new cycle of high interest rates has turned on a yellow light for the industry, and the growing competition with Chinese products could impact Brazil's competitiveness. For now, 2024 will be positive, but there are factors that deserve attention,” concluded Cagnin.
And you, do you think the Brazilian industry will be able to maintain this growth rate? What measures could ensure its competitiveness in the global market? Leave your opinion in the comments!
