Why this is important to Wisconsin businesses: Encouraging trends in industrial production and employment are causing analysts to improve their predictions and consumers to feel more confident.
The two biggest victims of the Brazilian recession - the economy and the job market - are finally undergoing a consistent, albeit slow and gradual, recovery. Also contributing to this positive scenario: inflation is under control, boosting the population’s purchasing power and reducing the cost of money.
In the last quarter, 1.1 million jobs were created in Brazil. Industry grew 3.1 percent during the same period—the strongest pace in four years. The expansion was widespread, affecting all the main industry segments—including the strategic sector of machines and equipment, which is driving a renewed interest in investment.
Aiming to reduce the cost of productive investment in Brazil, the government has also slashed import tariffs from 2 percent to zero on 4,903 categories of machines, equipment and computer products that are not manufactured in the country. These are to be used in investment projects with a total value of $3.1 billion.
These positive developments should be celebrated even though the country still has a long way to go before the effects of the crisis are reversed. Nonetheless, consumers, who represent the great driving force of the Brazilian economy, are already showing willingness to spend.
Large retail chains have been consistently logging positive results. At first, economists credited this trend to the R$40 billion ($12.4 billion USD) dumped into the economy by the release of the FGTS, an employee reserve that is to be used under certain circumstances strictly indicated by law. But it is not just that: another thermometer of the economy recovery is the automotive sector. Vehicle sales in October 2017 reached 196,000 units, a 27 percent increase compared to the same period the year before. Auto makers have noticed the upturn in buyers' confidence and have scheduled a series of launches for late 2017 and early 2018.
With the growth of the industrial output for an eighth consecutive month, and firms purchasing greater inputs to support stronger activity, analysts no longer doubt that Brazil has entered a recovery phase, and they predict this will be the best Christmas in Brazil since 2014. In addition. Brazil’s growth forecast was revised to 0.6 percent for 2017 and 1.5 percent for 2018.