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The quarterly index fell 2,3% due to the drop in production and capital costs, including electricity, fuel oil and personnel.
Os industrial costs had a significant variation in the third quarter 2023, according to the latest survey released by National Confederation of Industry (CNI). There was a 2,3% drop compared to the previous quarter, but costs still remain at a high level, being 25,3% above pre-pandemic levels.
This reduction in costs of the industry is positive news for the sector, however, it is also important to pay attention to expenses and spending that directly influence companies’ financial results.
Production cost falls due to reduction in intermediate goods costs
According to the CNI economic team, the is quarterly in production cost, which was 2,7%, is a positive sign for the industry. However, even with this reduction, the index is still 41,5% higher high than before the Covid-19 pandemic. All three components of the production cost presented recoil, with emphasis on the cost of intermediate goods, which fell 3,4% and contributed significantly to the quarterly result. Despite this, the cost is still 47% higher than before the pandemic.
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The other components of production costs recorded less significant declines. The reduction in the cost of electricity was 0,2% due to the decrease in the cost of natural gas, offsetting the increases in the costs of electricity and fuel oil. The cost of personal had a drop of just 0,2%.
Fall in the cost of capital occurs for the second quarter in a row
The data released shows that, after seven quarters of increases, there was the second consecutive drop in the capital cost index, totaling 2,1%. According to CNI analysis, this decrease is related to the reduction in the basic interest rate, which suffered two cuts of 0,5 percentage points throughout that quarter. Despite the decline, capital spending still increased by 44,8% compared to the pre-pandemic period.
Industry tax cost is the only index that shows an increase
The tax cost increased by 0,7% compared to the third and second quarter of 2023. This index is measured by the sum of federal and state taxes paid by the industry divided by the industry GDP.
While federal taxes increased by 6,2%, state taxes increased by 7,2% in the period. Industrial GDP in current values also increased by 6,1% in the quarter. Despite this increase, the tax cost is still at a lower level than at the beginning of 2022, but higher than before the pandemic.
Source: Industry Portal
