Brazil has built a dynamic manufacturing sector over decades that helped the country grow, but recent indicators show manufacturing growing slower than other sectors and its share of the economy declining. This analysis alone could be misleading, as manufacturing has undergone transformations like outsourcing production. By using a comparative industry analysis tool, the author finds evidence that Brazil's manufacturing sector is losing competitiveness at both the domestic and international levels, with declining output, employment, productivity, and trade surplus in manufacturing goods. The author argues that challenges facing Brazilian manufacturing require strategic policy reforms and investments to boost the sector.
The Bureau of Labor Statistics reported that in November 2014 there were 5.0 million job openings, little changed from October. Hires were also little changed at 5.0 million, while separations declined slightly to 4.6 million. The job openings rate was 3.4% and rates for hires and separations were 3.6% and 3.3%, respectively. Over the past year, total nonfarm job openings, hires and separations all increased, resulting in a net employment gain of 2.7 million.
Developed, sizes, growth
2. True or False? Identify whether each of these statements is true or false.
a) Emerging markets are less risky than developed markets. (FALSE)
b) Emerging markets offer the prospect of higher returns than developed markets. (TRUE)
c) Emerging markets are more stable than developed markets. (FALSE)
d) Emerging markets are less regulated than developed markets. (TRUE)
3. Explain two risks of investing in emerging markets.
Political instability and changes in government policy can undermine investments. Currency risks are also high as emerging market currencies may experience high inflation or sudden devaluations against major currencies like the US dollar.
Monthly statistical e-bulletin comprising about 30 tables and some charts with the latest available economic/financial market indicators, both Indian and Global.
This document summarizes key points from an economic analysis:
1) Negative economic growth is expected in the US due to declining productivity, elevated inventory levels, and falling real wages.
2) Productivity fell in the first half of 2011, leading to rising unit labor costs and the potential for future layoffs.
3) Inventory levels rose substantially since 2009 but are now at elevated, undesired levels, setting the stage for production slowdowns.
4) Real wages have fallen over the past year, reducing consumer income and spending which will drag on GDP growth.
5) Recent increases in the money supply likely reflect a shift to low-yield assets rather than new economic activity.
World: Tallow - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox has just published its report: "World: Tallow - Market Report. Analysis And Forecast To 2025". The report provides an in-depth analysis of the global tallow market. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term. Profiles of the leading producers are also included.
World: Slate - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Slate - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global slate market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
Australia: Margarine And Shortening - Market Report. Analysis and Forecast to...IndexBox Marketing
IndexBox Marketing has just published its report: "Australia: Margarine And Shortening - Market Report. Analysis and Forecast to 2025". The report provides an in-depth analysis of the Margarine and shortening Market in Australia. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
The Bureau of Labor Statistics reported that in November 2014 there were 5.0 million job openings, little changed from October. Hires were also little changed at 5.0 million, while separations declined slightly to 4.6 million. The job openings rate was 3.4% and rates for hires and separations were 3.6% and 3.3%, respectively. Over the past year, total nonfarm job openings, hires and separations all increased, resulting in a net employment gain of 2.7 million.
Developed, sizes, growth
2. True or False? Identify whether each of these statements is true or false.
a) Emerging markets are less risky than developed markets. (FALSE)
b) Emerging markets offer the prospect of higher returns than developed markets. (TRUE)
c) Emerging markets are more stable than developed markets. (FALSE)
d) Emerging markets are less regulated than developed markets. (TRUE)
3. Explain two risks of investing in emerging markets.
Political instability and changes in government policy can undermine investments. Currency risks are also high as emerging market currencies may experience high inflation or sudden devaluations against major currencies like the US dollar.
Monthly statistical e-bulletin comprising about 30 tables and some charts with the latest available economic/financial market indicators, both Indian and Global.
This document summarizes key points from an economic analysis:
1) Negative economic growth is expected in the US due to declining productivity, elevated inventory levels, and falling real wages.
2) Productivity fell in the first half of 2011, leading to rising unit labor costs and the potential for future layoffs.
3) Inventory levels rose substantially since 2009 but are now at elevated, undesired levels, setting the stage for production slowdowns.
4) Real wages have fallen over the past year, reducing consumer income and spending which will drag on GDP growth.
5) Recent increases in the money supply likely reflect a shift to low-yield assets rather than new economic activity.
World: Tallow - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox has just published its report: "World: Tallow - Market Report. Analysis And Forecast To 2025". The report provides an in-depth analysis of the global tallow market. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term. Profiles of the leading producers are also included.
World: Slate - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Slate - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global slate market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
Australia: Margarine And Shortening - Market Report. Analysis and Forecast to...IndexBox Marketing
IndexBox Marketing has just published its report: "Australia: Margarine And Shortening - Market Report. Analysis and Forecast to 2025". The report provides an in-depth analysis of the Margarine and shortening Market in Australia. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
World: Polyethylene - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: "World: Polyethylene - Market Report. Analysis and Forecast to 2025". This report has been designed to provide a detailed analysis of the global polyethylene market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
The Swedish Economy No.8 - November 30, 2011 Swedbank
The Swedish economy experienced strong GDP growth in the third quarter but indicators show weakening underlying growth dynamics. Exports continue to grow but are reliant on slowing global demand while domestic demand is cautious. The labor market is cooling with rising unemployment and layoffs as collective bargaining negotiations face challenges of weak wage growth and a slowing economy. Overall the Swedish economy remains stable for now but faces risks from a weakening global economy and declining confidence.
Bosnia And Herzegovina: Wheat - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox has just published its report: “Bosnia And Herzegovina: Wheat - Market Report. Analysis And Forecast To 2025”. The report provides an in-depth analysis of the wheat market in Bosnia And Herzegovina. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
World: Sunglasses - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Sunglasses - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global sunglasses market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
The Indian stock markets started the week quietly, with the Nifty trading in a narrow 20-point range. Market sentiment was boosted by an early monsoon. Technically, 5520 could act as resistance for the Nifty to reach 5600. The Sensex closed at 18,232, down 0.19%, while the Nifty closed flat at 5,473. In global markets, US indexes closed slightly higher on a weaker dollar. Asian stocks rose on hopes of more European assistance for Greece. Commodity prices were mostly flat. The rupee strengthened against the dollar.
Highlights of the third quarter of 2012. Net sales amounted to SEK 27,171m (25,650) and income for the period was SEK 985m (825), or SEK 3.43 (2.90) per share. Net sales improved by 5.9%, of which 4.6% was organic growth, 5.1% acquisitions and –3.8% changes in exchange rates.
IndexBox Marketing has just published its report: “EU: Domestic, Non-electric, Cooking Or Heating Appliances - Market Report. Analysis And Forecast To 2020”. This report focuses on the EU domestic, non-electric, cooking or heating appliances market, providing a comprehensive analysis and the most recent data on its market size and volume, EU trade, price dynamics, domestic production, and turnover in the industry. The market trends section reveals the main issues and uncertainties concerning the industry, while the medium-term outlook uncovers market prospects. The attractivity index (IB Index) summarizes the source of existing opportunities as they appear in this market, as well as an interpretation of the trade figures.
World: Magnesite - Market Report. Analysis and Forecast to 2025IndexBox Marketing
This document provides a sample summary of a report on the global magnesite market from 2007 to 2025. It includes key findings on market volume, value, production, imports and exports from 2007-2015. The summary also highlights consumption trends by country in 2015 and import growth rates and market shares by country. The report contains forecasts for market growth through 2025 and profiles of major producers. Tables and figures present data on historical and projected trade, production and price trends.
Iran: Lentils - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: “Iran: Lentils - Market Report. Analysis And Forecast To 2025”.
The report provides an in-depth analysis of the lentil market in Iran. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
Brazil: Potato - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: "Brazil: Potato - Market Report. Analysis And Forecast To 2025".The report provides an in-depth analysis of the potato market in Brazil. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. Forecasts illustrate how the market will be transformed in the medium term.
World: Printers - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Printers - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global printer market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
Kenya: Onion (Dry) - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: "Kenya: Onion (Dry) - Market Report. Analysis And Forecast To 2025".
The report provides an in-depth analysis of the onion market in Kenya. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
Stats SA Quartely Labour Force Survey 2018SABC News
This document is a statistical release from Statistics South Africa that summarizes key labour market indicators from the Quarterly Labour Force Survey for Quarter 2 of 2018. Some highlights include a national unemployment rate of 27.2% and employment decreasing by 9000 jobs compared to the previous quarter. The formal sector lost 21000 jobs while the informal sector gained 12000. By industry, community and social services saw the largest employment gains.
The document summarizes Pakistan's economic growth and investment over the past year. It states that Pakistan's economy grew by an estimated 4.1% in 2009-10, a turnaround from the previous year's growth of 1.2%. However, the recovery remains fragile as not all sectors and regions have benefited equally from the modest upturn. Unemployment also increased moderately. Stronger growth will require resolving long-standing structural issues around resource mobilization and productivity.
Peru has a population of 28.2 million and a growing economy focused on exports. GDP grew over 9% in the first half of 2008 and investment increased 32.9% in the third quarter. Exports reached a record $27.6 billion in 2007 and increased 29.6% in the first half of 2008. Peru has experienced strong and stable economic growth over the past decade due to fiscal discipline, monetary policy stability, and a stable currency. Inflation has remained low and the exchange rate has appreciated an average of 7% annually against the US dollar.
1. The labor force in Indonesia has grown gradually from 106.3 million in 2006 to 119.4 million in 2011. Unemployment has decreased from 11.1 million to 8.12 million over this period.
2. The largest employer is agriculture at 42.47 million workers in 2011. Trading/hotels/restaurants employed 23.24 million. Unemployment is highest among those with diplomas and university degrees.
3. While more Indonesians are achieving higher education levels, unemployment remains higher for these groups compared to those with lower education levels, posing a challenge for the government.
The document provides an overview of recent economic developments in China and the expected impact of the global financial crisis. It summarizes that:
1) While China's financial system has been relatively insulated so far, the real economy is slowing down significantly as exports begin to weaken with the global downturn.
2) Domestic investment and industrial growth have already declined in 2008 in response to earlier monetary tightening.
3) The government has adopted a more stimulative policy approach and higher government spending will play a key role in supporting growth in 2009, with the goal of rebalancing the economy over the long run.
Pakistan's economy faces challenges from recent floods and inflation. Growth was only 2.4% in FY2011 due to energy shortages and security issues. The services sector contributed most to growth while manufacturing declined. Investment has fallen significantly as a percentage of GDP in recent years. The fiscal deficit widened to 6.3% of GDP in FY2010 due to higher spending and weaker revenues. Inflation averaged 14.1% in FY2011 while the current account deficit improved due to higher exports and remittances. Foreign direct investment continues to decline.
Presentation by Robert Shackleton, an analyst in CBO’s Macroeconomic Analysis Division, at the NABE Foundation 17th Annual Economic Measurement Seminar.
The issue of Foreign Direct Investment (FDI) has been receiving phenomenal attention from many governments. Bangladesh is not lagging behind from it. Economic development for the developing countries like Bangladesh is largely dependent on FDI. The major challenges for the host country are to ensure an eye-catching and conducive investment climate to foreign investors for FDI inflow. In recent years, Bangladesh has been devoting efforts for attracting FDI offering a lot of lucrative incentives and benefits. Though attempts taken to increase FDI inflow, the result achieved is not appreciable enough for Bangladesh. This term paper will portray the FDI inflow since 1995 and finds out causes and reasons of low-inflow based on data available in web. Here different indices have been shown graphically which have substantial impact on investment decision of foreign investors. Recent indices are illustrated and briefly analyzed here collected from Doing Business Report 2011, Human Development Report 2010, Bangladesh Economic Review 2011, Major economic indicators: monthly update (volume 06/2010), Bangladesh Bank and Global Competitiveness Report by Center for Policy Dialogue. Export data and information on EPZs have also been stated here importantly. Incentives for foreign investors offered by Bangladesh Government and competitive advantages of doing business in Bangladesh are two very important parts stated in this paper. It also finds out the impediments and highlighted prospects for FDI in Bangladesh and provides some recommendations for its enhancements.
World: Polyethylene - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: "World: Polyethylene - Market Report. Analysis and Forecast to 2025". This report has been designed to provide a detailed analysis of the global polyethylene market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
The Swedish Economy No.8 - November 30, 2011 Swedbank
The Swedish economy experienced strong GDP growth in the third quarter but indicators show weakening underlying growth dynamics. Exports continue to grow but are reliant on slowing global demand while domestic demand is cautious. The labor market is cooling with rising unemployment and layoffs as collective bargaining negotiations face challenges of weak wage growth and a slowing economy. Overall the Swedish economy remains stable for now but faces risks from a weakening global economy and declining confidence.
Bosnia And Herzegovina: Wheat - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox has just published its report: “Bosnia And Herzegovina: Wheat - Market Report. Analysis And Forecast To 2025”. The report provides an in-depth analysis of the wheat market in Bosnia And Herzegovina. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
World: Sunglasses - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Sunglasses - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global sunglasses market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
The Indian stock markets started the week quietly, with the Nifty trading in a narrow 20-point range. Market sentiment was boosted by an early monsoon. Technically, 5520 could act as resistance for the Nifty to reach 5600. The Sensex closed at 18,232, down 0.19%, while the Nifty closed flat at 5,473. In global markets, US indexes closed slightly higher on a weaker dollar. Asian stocks rose on hopes of more European assistance for Greece. Commodity prices were mostly flat. The rupee strengthened against the dollar.
Highlights of the third quarter of 2012. Net sales amounted to SEK 27,171m (25,650) and income for the period was SEK 985m (825), or SEK 3.43 (2.90) per share. Net sales improved by 5.9%, of which 4.6% was organic growth, 5.1% acquisitions and –3.8% changes in exchange rates.
IndexBox Marketing has just published its report: “EU: Domestic, Non-electric, Cooking Or Heating Appliances - Market Report. Analysis And Forecast To 2020”. This report focuses on the EU domestic, non-electric, cooking or heating appliances market, providing a comprehensive analysis and the most recent data on its market size and volume, EU trade, price dynamics, domestic production, and turnover in the industry. The market trends section reveals the main issues and uncertainties concerning the industry, while the medium-term outlook uncovers market prospects. The attractivity index (IB Index) summarizes the source of existing opportunities as they appear in this market, as well as an interpretation of the trade figures.
World: Magnesite - Market Report. Analysis and Forecast to 2025IndexBox Marketing
This document provides a sample summary of a report on the global magnesite market from 2007 to 2025. It includes key findings on market volume, value, production, imports and exports from 2007-2015. The summary also highlights consumption trends by country in 2015 and import growth rates and market shares by country. The report contains forecasts for market growth through 2025 and profiles of major producers. Tables and figures present data on historical and projected trade, production and price trends.
Iran: Lentils - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: “Iran: Lentils - Market Report. Analysis And Forecast To 2025”.
The report provides an in-depth analysis of the lentil market in Iran. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
Brazil: Potato - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: "Brazil: Potato - Market Report. Analysis And Forecast To 2025".The report provides an in-depth analysis of the potato market in Brazil. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. Forecasts illustrate how the market will be transformed in the medium term.
World: Printers - Market Report. Analysis and Forecast to 2025IndexBox Marketing
IndexBox has just published its report: “World: Printers - Market Report. Analysis and Forecast to 2025”. This report has been designed to provide a detailed analysis of the global printer market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices. The report also includes a comparative analysis of the leading consuming countries, revealing opportunities opened for producers and exporters across the globe. The forecast outlines market prospects to 2025.
Kenya: Onion (Dry) - Market Report. Analysis And Forecast To 2025IndexBox Marketing
IndexBox Marketing has just published its report: "Kenya: Onion (Dry) - Market Report. Analysis And Forecast To 2025".
The report provides an in-depth analysis of the onion market in Kenya. It presents the latest data of the market value, consumption, domestic production, exports and imports, price dynamics and food balance. The report shows the sales data, allowing you to identify the key drivers and restraints. You can find here a strategic analysis of key factors influencing the market. Forecasts illustrate how the market will be transformed in the medium term.
Stats SA Quartely Labour Force Survey 2018SABC News
This document is a statistical release from Statistics South Africa that summarizes key labour market indicators from the Quarterly Labour Force Survey for Quarter 2 of 2018. Some highlights include a national unemployment rate of 27.2% and employment decreasing by 9000 jobs compared to the previous quarter. The formal sector lost 21000 jobs while the informal sector gained 12000. By industry, community and social services saw the largest employment gains.
The document summarizes Pakistan's economic growth and investment over the past year. It states that Pakistan's economy grew by an estimated 4.1% in 2009-10, a turnaround from the previous year's growth of 1.2%. However, the recovery remains fragile as not all sectors and regions have benefited equally from the modest upturn. Unemployment also increased moderately. Stronger growth will require resolving long-standing structural issues around resource mobilization and productivity.
Peru has a population of 28.2 million and a growing economy focused on exports. GDP grew over 9% in the first half of 2008 and investment increased 32.9% in the third quarter. Exports reached a record $27.6 billion in 2007 and increased 29.6% in the first half of 2008. Peru has experienced strong and stable economic growth over the past decade due to fiscal discipline, monetary policy stability, and a stable currency. Inflation has remained low and the exchange rate has appreciated an average of 7% annually against the US dollar.
1. The labor force in Indonesia has grown gradually from 106.3 million in 2006 to 119.4 million in 2011. Unemployment has decreased from 11.1 million to 8.12 million over this period.
2. The largest employer is agriculture at 42.47 million workers in 2011. Trading/hotels/restaurants employed 23.24 million. Unemployment is highest among those with diplomas and university degrees.
3. While more Indonesians are achieving higher education levels, unemployment remains higher for these groups compared to those with lower education levels, posing a challenge for the government.
The document provides an overview of recent economic developments in China and the expected impact of the global financial crisis. It summarizes that:
1) While China's financial system has been relatively insulated so far, the real economy is slowing down significantly as exports begin to weaken with the global downturn.
2) Domestic investment and industrial growth have already declined in 2008 in response to earlier monetary tightening.
3) The government has adopted a more stimulative policy approach and higher government spending will play a key role in supporting growth in 2009, with the goal of rebalancing the economy over the long run.
Pakistan's economy faces challenges from recent floods and inflation. Growth was only 2.4% in FY2011 due to energy shortages and security issues. The services sector contributed most to growth while manufacturing declined. Investment has fallen significantly as a percentage of GDP in recent years. The fiscal deficit widened to 6.3% of GDP in FY2010 due to higher spending and weaker revenues. Inflation averaged 14.1% in FY2011 while the current account deficit improved due to higher exports and remittances. Foreign direct investment continues to decline.
Presentation by Robert Shackleton, an analyst in CBO’s Macroeconomic Analysis Division, at the NABE Foundation 17th Annual Economic Measurement Seminar.
The issue of Foreign Direct Investment (FDI) has been receiving phenomenal attention from many governments. Bangladesh is not lagging behind from it. Economic development for the developing countries like Bangladesh is largely dependent on FDI. The major challenges for the host country are to ensure an eye-catching and conducive investment climate to foreign investors for FDI inflow. In recent years, Bangladesh has been devoting efforts for attracting FDI offering a lot of lucrative incentives and benefits. Though attempts taken to increase FDI inflow, the result achieved is not appreciable enough for Bangladesh. This term paper will portray the FDI inflow since 1995 and finds out causes and reasons of low-inflow based on data available in web. Here different indices have been shown graphically which have substantial impact on investment decision of foreign investors. Recent indices are illustrated and briefly analyzed here collected from Doing Business Report 2011, Human Development Report 2010, Bangladesh Economic Review 2011, Major economic indicators: monthly update (volume 06/2010), Bangladesh Bank and Global Competitiveness Report by Center for Policy Dialogue. Export data and information on EPZs have also been stated here importantly. Incentives for foreign investors offered by Bangladesh Government and competitive advantages of doing business in Bangladesh are two very important parts stated in this paper. It also finds out the impediments and highlighted prospects for FDI in Bangladesh and provides some recommendations for its enhancements.
The document provides an overview of Brazil's economy before and after the 2008 global economic slowdown. It discusses three key periods: [1] before 2003 when the economy was driven by agriculture and mining; [2] from 2003-2008 which was a growth period after reforms that opened the economy to foreign investment; and [3] post-2008 when Brazil was impacted by but recovered quickly from the global recession through stimulus spending and job creation projects. The economy has since transitioned to a services-based industry and Brazil is now among the seven largest economies in the world.
This document provides an overview of Bahrain's economy through a macroeconomic study including key indicators from 2005-2009. It finds that Bahrain is highly dependent on oil which accounts for over 60% of GDP, and it faces issues of a declining oil supply. When oil prices dropped in 2008-2009, the current account surplus fell dramatically and the government ran its first deficit since 2002. Other economic problems discussed include volatility in the aluminum and real estate sectors due to the global recession, high youth unemployment, and political/social tensions between the Sunni ruling family and Shia population. The document concludes by noting Bahrain's ongoing efforts to diversify its economy beyond oil.
A2 & AS Economics: UK Economy Revision Briefingtutor2u
The UK economy suffered a deep recession from 2008-2009 and recovery has been slow and fragile with growth below 1% in most years since. Weak private sector demand from falling real incomes and low business investment have held back growth. Export growth has also slowed in recent years. The government has pursued fiscal austerity measures and spending cuts to reduce large budget deficits, further weighing on growth. Restoring stronger growth and rebalancing the economy away from debt-fuelled consumption toward exports and investment will require boosting productivity, business investment, and improving the supply of credit. Potential growth rates are estimated to have declined significantly in recent years due to factors like low R&D spending and business investment.
Budget Preview 2015-16: 'Acche din' for capital market?IndiaNotes.com
FY16 Union Budget would be presented in the backdrop of easing inflation and interest rates but continued growth challenges which the government needs to address.
http://pwc.to/1lN91cC
Comme tous les mois, l’équipe d’économistes de PwC publie une note sur la situation macro-économique mondiale. Ce mois-ci, focus sur l’accroissement des inégalités dans les pays matures ; les incertitudes concernant la croissance chinoise ; et les prévisions de croissance pour la Grande-Bretagne.
This study aims to explain the macroeconomic and welfare impacts of changes in indirect taxes brought about in response to COVID-19. We study whether the tax relief provided for in the federal budget for fiscal year 2020-21 was effective in providing relief to private enterprises and the trade sector. We also study whether production subsidies granted during the first wave of COVID-19 were effectively able to support firms in the agricultural sector. This assessment allows us to draw lessons that may be useful for designing tax benefit policies amid future waves of the pandemic or during other emergency times.
This document provides an overview of key macroeconomic statistics including Gross Domestic Product (GDP), the Consumer Price Index (CPI), and the unemployment rate. It discusses how GDP can be measured through expenditures, income, and value added. The components of GDP expenditures are defined as consumption, investment, government spending, and net exports. Real GDP is introduced to control for inflation. The GDP deflator and inflation rates are also explained.
U.S. Household Cooking Appliance Market. Analysis And Forecast to 2020IndexBox Marketing
This document provides a sample report on the U.S. household cooking appliance market from 2016-2020. It includes an executive summary with key findings on market value, production, imports, and exports in 2015. The report then covers market overview with data on market size and trade balance from 2008-2015, as well as a market forecast to 2020. It also includes sections on domestic production, imports, exports, competitive landscape, and company profiles. Tables and figures present statistical data on topics like production by type, trade by country, import and export prices, number of establishments and employees.
The document summarizes Mongolia's economic situation in June 2009 based on data from the Bank of Mongolia, National Statistical Office, and Ministry of Finance. It finds that while some financial indicators were stable, the economic slowdown continued to negatively impact the fiscal and real sectors. Total government revenues fell significantly due to lower tax revenues. The trade deficit narrowed as imports fell faster than exports. The World Bank approved $40 million in budget support to help Mongolia manage the economic downturn.
U.S. Bottled Water Market. Analysis And Forecast to 2020IndexBox Marketing
IndexBox Marketing has just published its report: “U.S. Bottled Water Market. Analysis And Forecast to 2020”.
The report provides an in-depth analysis of the U.S. bottled water market. It presents the latest data of the market size and volume, domestic production, exports and imports, price dynamics and turnover in the industry. In addition, the report contains insightful information about the industry, including industry life cycle, business locations, productivity, employment and many other crucial aspects. The Company Profiles section contains relevant data on the major players in the industry.
Government revises its 2009 real GDP growth forecast. The Prime
Minister (PM) announced yesterday that the official real GDP growth
forecast for this year is now between -4% and -5% from +1% to -1%
announced by Bank Negara Malaysia (BNM) in Mar 09. This is due to
the impact of the global recession on external demand which also
weakened domestic demand, especially private investment (1Q09: -
26% YoY), including FDI (1Q09: -50% YoY). However, apart from
mentioning a 25% drop in exports, no detailed breakdown of the
revised forecast was provided.
1) O documento discute a relação entre Produção Mais Limpa (P+L) e práticas de produção enxuta com o objetivo de indicar ferramentas que facilitem o desenvolvimento sustentável de empresas industriais sem custos adicionais.
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1. Is Brazilian Manufacturing Losing its Drive?
Jorge Arbache1
Abstract
Brazil has built over the decades, with great effort and sacrifice, a dynamic, integrated
manufacturing sector that has helped the country grow and become one of the world’s largest
economies. Recently, though, basic indicators, such as the performance of output and
employment, have suggested that manufacturing is growing slower than other sectors and its
share in total output is on the wane. The problem with this type of analysis is that it may lead to
misleading conclusions due to the substantial transformations which industrial activity has
undergone, such as the vertical specialization that decentralizes and fragments production with
gains in efficiency and innovation, and the more than proportional increase in consumption of
services in economies that have urbanized and modernized. For this reason, a careful
examination of the evolution of the drive of the Brazilian manufacturing sector requires broader,
comparative analyses, combined with the usual analysis of performance indicators at the
domestic level. This article employs the industry-space method (Arbache 2012), a simple but
useful tool for comparative analysis of industrial development, to assess the case of Brazil. We
find evidence that the Brazilian manufacturing sector is indeed losing its drive both at national
and international levels. The article discusses the origins of the slowdown, and the new
challenges faced by Brazilian industry. The article argues that, although challenges are
extensive and complex, several business and investment opportunities emerging in Brazil can
give a new boost to the manufacturing sector and take it to a new level of development,
provided that the public and private sectors undertake the reforms and actions needed for
industry to benefit fully from such opportunities. The article closes by discussing policy
strategies that can boost the industrial sector.
October 2012
Keywords: Manufacturing sector, competitiveness, productivity, international
trade, innovation, industrial policies, Brazil
JEL Codes: F14, L60, O14, 025
1
Professor of Economics at the University of Brasilia and Advisor to the President of the
Brazilian Development Bank (BNDES). This article does not necessarily represent the opinions
and views of the BNDES and its Board of Directors. I would like to thank Andrea Goldstein,
Ernesto Lozardo, Philip Schellekens, Victor Burns, Gianna Sagazio, and Fabiano Bastos for
their useful comments and suggestions on an earlier version of this article. Contact:
Jarbache@gmail.com.
1
2. 1. Introduction
With great effort and sacrifice, Brazil has built a dynamic, integrated
manufacturing that has helped the country grow and become one of the world’s
largest economies.2 Recently, though, basic indicators, such as the
performance of output and employment, have suggested that the manufacturing
sector is growing slower than other sectors and its share of the economy is on
the wane. These transformations, which are not particular to Brazil, but rather to
emerging economies that integrate the world economy, have led many to claim
an across-the-board reduction in manufacturing’s share in GDP.
The problem with this type of analysis is that it may lead to misleading
conclusions. This is because of (i) the substantial transformations which
industrial activity has undergone, such as the vertical specialization that
decentralizes and fragments production with gains in efficiency and innovation;3
(ii) the more than proportional increase in consumption of services in economies
that have been urbanized and modernized (Rowthorn and Ramaswamy 1997);
and (iii) the methodological difficulties in calculating the sectorial share of
manufacturing in GDP associated with the increasingly complex relationship
between this and the service sector. Besides these factors, there are others
specifically related to Brazil, such as the “overindustrialization” in the 1970s
associated with the import substitution industrialization era (Bonelli and Pessoa
2010), problems with relative prices and deflators of output and investment
(Ferreira et al 2008), changes in national statistics, among others.
For these reasons, an examination of the drive in Brazilian manufacturing
requires broader and comparative analyses, combined with the usual analysis
of performance indicators at the domestic level. In order to do so, this article
employs the industry-space method (Arbache 2012), a simple but useful tool for
comparative analysis of industrial development over time. We find evidence that
Brazilian industry is indeed losing its drive at the international level. This result
confirms and strengthens previous findings using domestic level data.
This article is organized as follows. Section 2 examines basic industry
performance indicators at the domestic level. Section 3 undertakes a
comparative analysis of industrial development at the international level.
Section 4 discusses the origins of the slowdown in the drive of the Brazilian
manufacturing, highlighting issues such as low labor productivity and low
2
There is a rich empirical literature suggesting that economic development and long term
growth are associated with a modern, diversified and integrated industrial sector (e.g. United
Nations 2007).
3
Cross-border investment, offshore trade, outsourcing and value chains brought substantial
changes to trade pattern and industrial production. The existing international trade statistics are
still based on traditional trade, which is difficult to accurately reflect the entire process of global
production chain and unable to consider changes in international trade and production.
2
3. investment in infrastructure and innovation. Section 5 discusses the new
challenges faced by Brazilian industry, such as the rapid demographic
transformation, the new geography of production and innovation, and the rise of
State capitalism. Section 6 argues that, although industry’s challenges are
extensive and complex, the several business and investment opportunities
emerging in Brazil can give it a new boost and take it to a new level of
development, provided that the public and private sectors take on the reforms
and investments needed for the sector to benefit fully from such opportunities.
Finally, the last section concludes with suggestions for policy strategies to boost
industry.
2. The recent performance of Brazilian manufacturing sector
Chart 1 shows the sectorial output performance from 2000 to early 2012.4
Manufacturing was, arguably, the sector with the slower pace and also the most
affected by the financial crises of 2008/09. Output has stagnated since then.
Chart 1: Sectoral output (1995=100)
Quarterly output, moving average 12 months
Source: IBGE
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1°
Agriculture Mining Manufacturing Service
Chart 2 shows the sectorial job performance. Growth in manufacturing
employment was on par with other sectors until the onset of the financial crisis.
Since then, it has grown at a much slower pace than the service and mineral
sectors. Job performance in the agriculture sector is also slow, but the main
reason is the substantial improvement in labor productivity.
4
Due to availability and quality of data, and to mitigate problems arising from changes in the
statistics series of the IBGE, the article focuses on the period starting in 2000.
3
4. Chart 3 shows that, except for 2004, growth in manufacturing employment has
always been smaller than that of the economy as a whole and the gap has
widened since 2008. As a consequence, manufacturing’s share in job creation
went from 20.6% of the total in 2002-2007 to 11.8% in 2008-2011.5
Chart 2: Sectoral formal job - Moving average 12 months
Source: Ministry of Labor
130
120
110
100
90
80
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60
00
0
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1
02
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Mining Manufacturing Service Agriculture
Chart 3: Job creation (%)
Source: Ministry of Labor
12
9,6
10
7,7 7,9
8 7,5
6,9 6,6
6,2
5,8 5,7
6 5,4
4,7 4,5 4,4
3,6 3,8
4 3,5
2,8 2,8 2,7
2
0,7
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Brazil Manufacturing
Sectorial labor productivity in manufacturing has also lost pace compared to
other sectors. Ambrozio and Souza (2012) show that while labor productivity in
manufacturing grew -0.2% per year between 1995-2008, agriculture and mining
5
Despite the modest job creation in manufacturing, Arbache and Amorim (2012) found that the
inter-industry wage premium paid in this sector remained at around 12% throughout the 2000s
after controlling for human capital, demographic, geographic, sectorial traits, among other
variables. This result seems to be related to factors such as market structure, technological
intensity and market regulation.
4
5. grew 6.7% and 4.4%, respectively. Using a different set of data, IPEA (2012)
finds that labor productivity in manufacturing grew -0.9% per year between
2000-2009, while it grew 4.3%, 1.8% and 0.5% in the agriculture, mining and
service sectors, respectively.
Chart 4 shows that manufacturing goods represented 54.7% of total exports in
the beginning of the decade, but by 2011 their participation fell to 36%. Primary
products, in their turn, increased from 28% to 47.8%, becoming the defining
sector for the insertion of the Brazilian economy in the global trade arena.6
There were also significant changes in export coefficients and import
penetration, as shown in chart 5. Import penetration increased rapidly in several
sectors, including those which were traditionally occupied by domestic
companies, such as consumer goods. In the beginning of 2012, some 23.7% of
apparent consumption in the textile sector was being imported against 8.1% in
2000; clothes, 10.6% against 1.2%; leather artifacts, 46.1% against 6.6%;
chemicals, 25.7% against 15.3%; and rubber, 25.6% from 11.1%. Puga and
Nascimento (2010) show that import penetration increased more rapidly in the
labor and scale-intensive sectors.
Manufacturing trade, which was in surplus for several years, fell rapidly from
2006 and became a deficit by end of the decade – in 2011 the trade balance of
manufactured products was minus US$ 43.2 billion. If we exclude for a moment
the surplus in the low technological products group, which includes foodstuff,
lumber and pulp sectors, the manufacturing trade deficit would jump to US$
86.1 billion, almost three times the total trade surplus in that year. The Brazilian
trade balance is still in surplus thanks to primary products. Sarquis (2011)
identified a falling trend in the Brazilian intra-industry trade, while Baumann
(2012) found that Brazilian industrial exports are increasingly out of synch with
trends in the worldwide demand for manufactured products. Such evidence is a
strong sign that Brazilian industry is being left by the wayside in relation to
global manufacturing.
6
Part of this fall is related to the high prices of primary products in the 2000s.
5
6. Chart 4: Exports by sector - % of total
Source: Ministry of Trade and Development
65
60
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50
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40
35
30
25
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15
10
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Jan-
Apr
Basic products Semi-basic products Manufacturing
Chart 5: Export coefficient and import penetration (%)
Source: Confederation of National Industry
25
20,7
19,1
18,7
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20
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5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Export coefficient Import penetration
Chart 6 shows a falling trend in the manufacturing share in GDP. In 2011, the
manufacturing share was 14.6%, less than half of the figures recorded in the
early 1980s. The falling trend in manufacturing together with previous
indicators, suggest that the Brazilian manufacturing sector is losing its drive at
the domestic level.
6
7. Chart 6: Manufacturing share on GDP (%)
Source: WDI - World Bank
20
19,2
19
18 18,0 18,1
17,2 17,1
17 16,9
16,6 16,7
16,4 16,2
16
15,4
15
14,6
14
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
3. International comparison
To further analyze whether Brazilian industry is truly losing its drive, it is
necessary to go beyond the usual analysis of performance indicators, as
previously discussed, and assess it from the international perspective. To do so,
we make use of the industry-space analysis (Arbache 2012). Industry-space is
the locus where two simple, but revealing variables for analyzing industrial
development over time meet. The first variable is the manufacturing share in
GDP. The second is industrial density, which is manufacturing’s value added
per-capita. Industrial density captures the capacity, and perhaps the willingness,
of a society to build infrastructure, invest in physical and human capital and in
R&D, and to reform institutions and manage such resources so as to foster
industrial development (Arbache 2012). As this variable is strongly affected by
the size of the population and the demographic development, the focus of
analysis of this variable should go to the rate of growth rather than to its level
only.
As put forward by Arbache (2012), the relationship between the manufacturing
share in GDP and industrial density is complex and in fact it is difficult to predict
whether it will be positive or negative. The positive relationship is more likely to
occur in emerging economies that are still building and developing industrial
infrastructure. The weak or negative relationship is more likely to occur in
advanced economies whose industries are already mature and have
specialized in high-end manufactured products with lots of technological
services embodied, such as the iPad. Arbache (2012) finds empirical evidence
of a positive relationship up to a point; afterwards the manufacturing share
stagnates or even retreats, while industrial density keeps rising.
Brazilian industrial development from the international perspective
7
8. Charts 7 and 8 present the averages of the manufacturing share in Brazil’s
output and industrial density and in a sample of countries from 2000 to 2011.7
The average share of Brazilian manufacturing was 16.9%, comparable to that in
developed countries such as the United States, Canada, France and the
Netherlands, but quite below that in East Asian countries, such as South Korea,
China, Thailand, and Malaysia. Chart 7 shows that Brazil’s industrial density,
with an average of US$ 590, was closer to that in emerging economies such as
China, South Africa and Latin American countries, but substantially smaller than
that in developed economies. Therefore, comparing the share of manufacturing
in GDP in countries at very different stages of industrial development may be
misleading.
Chart 7: Manufacturing share on GDP (%) average 2000-2011
Source: WDI - World Bank
34,5
40
32,0
35
28,6
27,5
26,1
24,2
30
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7
All the data pertaining to the industry-space analysis is from the World Development
Indicators, World Bank. Industry value added is in constant dollars of 2000. The sample of
countries is highly diversified in terms of geography, income per capita and economic
characteristics.
8
9. Chart 8: Industrial density (constant US$) - average 2000-2011
8249
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Charts 9 and 10 present the industry-space in 2000 and 2011. It is worth noting
the significant increase in industrial density in Korea, Singapore and China, as
well as the drop in the manufacturing share in total output in France, Argentina
and Chile. Brazil’s manufacturing share also fell, as discussed before, while
industrial density increased slightly in the period. The gap between Brazil’s
manufacturing share and the sample’s average remained almost the same in
2000 and in 2011, at around 17% below the sample’s average. The same
persistence applied to industrial density, which remained at around 76% below
the sample’s average. More important than this persistence is the deterioration
of Brazil’s relative position compared to industrial competitors such as China,
Korea and Singapore, and even in relation to rising industrial powerhouses such
as Malaysia and Thailand.
The industry-space analysis suggests that Brazilian manufacturing is losing its
drive at the international level as well, while the economy is increasingly relying
on primary products. Among the expected implications of this impoverished
insertion of Brazil internationally are the exposure to sudden changes in terms
of trade, reduced capacity for technological and innovation development, and
lower and more volatile long-term economic growth. Indeed, stylized facts show
that commodity prices are extremely volatile, and the experience in the last
decades indicates that such prices are highly subjected to public and even
private interventions. Empirical evidence also reveals that countries that depend
on commodity exports present economic growth that is slower than that in
countries with a more diverse export portfolio, which is related to its higher
exposure to shocks and to the negative impacts of volatility in investment
decisions, fiscal revenue, export revenue and productivity (Loayza, Servén and
Ventura 2007). Lederman and Maloney (2007, 2008) show that this is not due
to the export of primary goods per se, but rather to the low diversification of
exports associated to low growth. Cavalcanti, Mohaddes and Raissi (2011)
9
10. present empirical evidence that rising commodity prices might bring some
benefits, but they also reveal that these benefits tend to be dominated by the
downside of commodity price volatility, which would explain the long-term low
growth tendency in countries that depend more on primary goods. Arbache and
Page (2007) show that countries that depend more on commodity exports grow
little, not because of a lack of the capacity to grow, but because they experience
stronger growth accelerations and stronger growth collapses, which make
average growth low in the long term. The authors also show that shocks in the
terms of trade are among the main causes of growth accelerations and
collapses in these countries. Cardoso and Teles (2010) show that fluctuations in
Brazilian output around the potential output between 1900 and 2008 are
strongly associated with shocks in the terms of trade.
Chart 9: Industry-space 2000
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10
11. Chart 10: Industry-space 2011
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MEX MAL
SAU TUR
1000 CHL VNZ PLA CHN THA
BRA
MIC
IDN IND SAR
0
0 5 10 15 20 25 30 35 40
Man. share on GDP (% )
Table 1 shows the industry-space for 2011 divided into four quadrants created
according to the sample’s averages. Countries were mapped out accordingly.
As expected, countries with strong industry and that focused on exports of high
value added industrial products fell into the first quadrant (Q1). This is the case
for Germany, Japan, South Korea and Singapore, or the countries whose
manufacturing could be called “Champions”. Countries with mature industry and
with a modern and sophisticated service sector, such as the United States,
France, Canada, the Netherlands and Norway, fell into the second quadrant
(Q2). Their manufacturing could be called “Mature”. Medium income countries
and those that foster policies to develop and strengthen their industries fell into
the fourth quadrant (Q4). These are the cases for China, Malaysia and
Thailand, or those countries whose manufacturing could be called “Tigers”.
Finally, the third quadrant (Q3) presents countries whose manufacturing sectors
lack drive, that are losing their drive, or those whose primary sectors are either
effectively, or are becoming dominant in the economy. This group includes
Venezuela, Saudi Arabia and Mexico, which depend heavily on oil; Chile, which
prioritized the development of the mining, agricultural and fishing sectors; South
Africa, which focuses heavily on mining, agriculture and services and whose
industry has faced severe hardships related to the apartheid;8 India, the second
world’s most populous country, the one with the largest poor population, and
8
For more details, see Draper and Alves (2009).
11
12. with a large agriculture and service sectors; and Latin American countries,
whose economies generally rely on commodities and have a significant informal
sector. These are the countries whose manufacturing could be called
“Laggards”. Brazil is in this last group.9
Table 1: Mapping out countries -- 2011
Canada Q2 Germany Q1
production) – below average / above average
France Japan
High Income Countries Singapore
Industrial density (per capita industrial
Norway South Korea
The Netherlands
United States
Argentina Q3 China Q4
Brazil Middle Income Countries
Chile Malaysia
India Thailand
Indonesia
Latin American Countries
Mexico
Saudi Arabia
South Africa
Turkey
Venezuela
Share of manufacturing on GDP (%) – below average / above average
To advance the examination of Brazilian industry’s drive further, we compare
Brazil to select countries. The comparison of the Brazilian experience with
China’s (Chart 11) shows large discrepancies in participation rates and in
industrial density. The participation of Chinese industry in the economy is nearly
twice that of Brazil. Chinese industrial density, however, started at a much lower
level than Brazil’s, at US$ 304 against US$ 551 in Brazil in 2000. However, as it
increased rapidly, among others, due to policies introduced to foster industrial
development, including R&D, credit and export promotion, by 2007 China’s
industrial density overtook Brazil’s, reaching US$ 904 in 2011, while Brazilian
industrial density was practically stagnant. Our simulations suggest that, with
the lasting and increasing rhythm of industrial density seen in the last decade,
China’s industry will fall into Q1 before the end of this decade. The comparison
between the two countries highlights the fact that the industrial density growth
rate is just as, or is even more important than its level. It also emphasizes the
importance of public policies aimed at fostering and supporting industrial
development.
9
The industry-space method is strongly affected by the size and composition of the sample of
countries. The inclusion of several African countries in the sample would significantly alter the
averages and, therefore, the classification of the countries in the quadrants of Table 1.
12
13. Chart 11: Brazil vs. China
35 1000
900
30
Industrial density (constant US$)
800
Man. share on GDP (%)
25 700
20 600
Brazil 500 Brazil
15 China China
400
10 300
200
5
100
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
The comparison with South Korea shows that the participation rate of Korean
industry, which was already substantially higher than Brazil’s at the beginning of
the decade, continued on an upward path and, by the end of the period, it was
almost twice Brazil’s participation (Chart 12). Industrial density, in its turn, which
was almost five times that in Brazil at the beginning of the decade, grew rapidly
and, in 2010, was eight times larger. The Korean case also draws attention to
the relevance of public policies, such as educational, technological and export
promotion, for industrial development.
Chart 12: Brazil vs. Korea
35 6000
30
Industrial density (constant US$)
5000
Man. share on GDP (%)
25
4000
20
Brazil Brazil
3000
15 Korea Korea
2000
10
5 1000
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The comparison between Brazil and Thailand reveals a similar path to the
Brazil-Korea analysis. The difference is that industrial densities in Brazil and
Thailand were similar in 2000, but differed throughout the decade due to the
fast growth in Thailand’s density (Chart 13). The Thai case also highlights the
role of public policies in industrial development.
Chart 13: Brazil vs. Thailand
13
14. 40 1200
35
Industrial density (constant US$)
Man. share on GDP (%) 1000
30
800
25
20 Brazil 600 Brazil
Thailand Thailand
15
400
10
200
5
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The Turkish participation rate follows a falling trend much like Brazil’s. However,
it stabilized in 2009 and has grown since then (Chart 14). Turkish density, in its
turn, presented a growing trend, increasing from US$ 840 in 2000 to US$ 1176
in 2011, up 40%.
Chart 14: Brazil vs. Turkey
25 Industrial density (constant US$) 1400
1200
20
Man. share on GDP (%)
1000
15
800
Brazil Brazil
10 Turkey 600 Turkey
400
5
200
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 20032004 2005 2006 20072008 2009 2010 2011
The path of Mexico’s participation rate is similar to Brazil’s, but has presented a
trend of slight increase since 2009 (Chart 15). Industrial density, which was
approximately twice Brazil’s in the early 2000s, has shown a positive trend
since 2003, despite the break in 2008/09 due to the financial crisis.
Chart 15: Brazil vs. Mexico
25 1200
Industrial density (constant US$)
20 1000
Man. share on GDP (%)
800
15
Brazil Brazil
600
10 Mexico Mexico
400
5
200
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 20052006 2007 2008 2009 2010 2011
The comparison with the United States shows some similarities in the level and
in the path of industry’s participation rate in the economy, but the American rate
contracted more than the Brazilian rate (Chart 16). However, when it comes to
industrial density, there is a substantial difference, since American industrial
density tended to increase in general after 2003, stopping in 2008/09, but
14
15. resuming the pattern in 2010. This exercise reinforces the view that comparing
the participation rates in countries with such different industrial densities might
be inappropriate and could lead to misleading conclusions.10
Chart 16: Brazil vs. the US
25 7000
Industrial density (constant US$)
6000
20
Man. share on GDP (%)
5000
15
4000
Brazil Brazil
10 USA 3000 USA
2000
5
1000
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The highest level of industrial density ever recorded in Brazil was US$ 623 in
2011. A similar level was recorded for the first time in Korea in 1982-1983.
Based on these simple figures, one could argue that Brazilian industry is about
29 years behind Korea’s. A similar exercise suggests that Brazilian industry was
also behind other countries’ industries, including Thailand (15 years behind),
Malaysia and Turkey (10 years behind).
Although Brazil has a manufacturing participation rate comparable to Q2
countries, it is also well behind them. This is because in the year they first
reached the same participation rate as Brazil’s current rate -- between 14% and
15% -- their industrial densities were substantially higher than Brazil’s, as
follows: Norway’s was US$ 3,522; the US’ was US$ 4,905; France’s was US$
3,319; and Canada’s was US$ 3,953. This exercise suggests that Brazilian
manufacturing contracted prematurely and well before reaching a higher level of
development.
Tidal-wave effect?
To examine whether the fall in Brazilian manufacturing resulted from an across-
the-board shrinking of industrial activity rather than from a movement particular
to Brazil, we calculate the growth rate of the manufacturing share in GDP and
the growth rate of industrial density. If there was indeed a “tidal-wave effect”,
then we should find an across-the-board pattern in these growth rates. Charts
17 and 18 suggest that there is no common pattern, even among commodity
producers and among developed countries. Countries have actually followed
quite different patterns overtime and therefore there are no stylized facts.
10
Besides the experiences reported here, many others deserve a word, such as India’s density,
which increased 85% from 2000 to 2011, even though it is still at quite a low level, as well as
the Argentine case, which shows a sharp fall in the manufacturing share in output since the
early 1990s.
15
16. Germany experienced a drop in manufacturing share, but an increase in
industrial density, whereas France experienced a drop in both indicators.
Indonesia saw a substantial drop in manufacturing share, but a significant rise
in industrial density, whereas Thailand advanced in manufacturing share and in
industrial density. Venezuela and Saudi Arabia, major oil producers, also
experienced quite distinct patterns. While both manufacturing share and
industrial density dropped in Venezuela, these indicators improved in Saudi
Arabia. This simple exercise suggests that there is no such “tidal-wave effect”.
Therefore, it is unlikely to have been the main explanation for the loss of drive of
Brazilian manufacturing.
Chart 17: Growth rate of manufacturing on GDP (%) - 2000-2011
20
10
0
d
un y
iA a
Fr a
Un Tu e
co Ge dia
n
ou s
ou y
sia
Th n a
M s
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Ar abia
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a
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Ca le
M te s
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-10 Co wa
e
C an
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Ve a nc
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Si fric
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In
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-40
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Chart 18: Growth rate of industrial density (%) - 2000-2011
250
200
150
100
50
0
d
y
a
Fr a
C pan
Ar ore
ou ia
er y
un s
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T h in a
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4. Explaining the low drive in Brazilian industry
The integration of the Brazilian economy in the world economy led to increasing
competition from foreign goods, especially Asian, in the domestic market, and
16
17. showed the lack of competitiveness in several segments of Brazilian
manufacturing. This section aims to briefly discuss the origins of such
competitiveness challenges.
The so-called Brazil Cost (Custo Brasil) refers to systemic shortcomings in the
Brazilian economy. Although companies in general suffer from domestic
weaknesses, including inadequate planning and poor management,11 the
environment in which they operate also influences their performance. As 71.5%
of the gross value of the output of industrial companies refers to inputs and
taxes (Arbache and Burns 2012), it is reasonable to suppose that the
competitiveness of industrial companies depends largely on conditions outside
the "factory floor".12 Particularly significant external obstacles include
shortcomings in infrastructure and logistics, which are identified by industrial
companies as some of the major constraints to their operations and
competitiveness (World Bank 2012). In fact, the more a company depends on
value chains and logistics to receive inputs and ship their products to
customers, the more it is exposed to the high costs associated with the low
systemic efficiency of Brazilian logistics.
Excessive red tape and taxes are also cited as major obstacles to industrial
competitiveness (World Bank 2012). Compounding taxes that require complex
management and that are high for world standards contribute to significantly
raising the final price of products and thus harming competitiveness. The ICMS
tax subsystem, an extremely complex, costly and fragmented VAT governed by
each federative state, constitutes an important barrier to efficiency. Besides
being high -- it can be as high as 25% -- the ICMS’ state laws are inconsistent
and foster fiscal wars. Of particular note in this area is the conclusion of a study
conducted by the Brazilian National Confederation of Industry (CNI), which has
identified that the tax burden on manufacturing is disproportionately high,
reaching up to 57.3% of the output of certain industries, while in agriculture it
reaches up to 3.7% and in services up to 21.1%.
Markets with few competitors, as well as regulatory and legal issues, also
compromise the competitiveness of industry. The case of energy is illustrative.
Although the price of energy in Brazil is always associated with high taxes, an
important part of the final price is due to a legal framework that leads to a low
number of competitors and discourages investment. Energy costs are among
11
Bloom et al (2011) show that manufacturing firms in Brazil tend to be poorly managed – joint
with India, Brazil actually ranks among the worst in a cross-country analysis. They also show
that there is a wide spread of management practices and a large tail of very badly managed
firms in the country.
12
Data are from the IBGE Annual Survey of Industry (PIA). According to the PIA classification,
inputs are the gross value of industrial production minus the industrial value added. Inputs
include workforce, financial services, industrial services, logistics, energy, among other items.
17
18. the highest in the world, despite Brazil having one of the largest renewable
energy matrix globally.
The increasing dependence of industrial enterprises on service providers and
outsourced services also impacts the competitiveness of the manufacturing
sector. This happens because, as shown by Arbache and Burns (2012),
services are expensive and of poor quality, affecting the cost and the
competitiveness of industry.13 Despite the poor quality and cost, expenses with
service inputs continue to grow – they went from 20.5% in 2007 to 24.5% in
2009.14
One of the most striking characteristics of the Brazilian economy vis-à-vis
comparable countries is poor labor productivity.15 However, as seen above, the
development of labor productivity in manufacturing has been particularly low,
which is a result of several factors, including, but not limited to, poor human
capital. Although Brazil has made significant progress in education over the last
decade – average schooling increased by 17% in the period – many emerging
countries have also made similar or even better improvement in education.16
Despite manufacturing workers having higher average education than the
average of the population, the sector’s indicators fall short. In fact, among
formal workers in manufacturing, some 52.8% has not finished high school and
26% has not finished elementary school. The rate of functional illiteracy among
manufacturing workers from 15 to 64 years of age is 26%, only slightly below
the country as a whole, which is 28.2%.17
Due to educational shortcomings as well as cognitive learning and knowledge
gaps, training and professional education have become increasingly important
to equip employees with labor skills. Such skills are required so that modern
industry can operate within the framework of the new forms of production that
entail more creativity, adaptability and innovation. According to the PNAD-IBGE
(National Household Survey), in 2007 only 34% of industrial workers had
attended a training course, and this shortcoming is partly due to the shortage in
opportunities for training, as well as technical and vocational education.
13
According to the IBGE, inflation in services has been higher than that for industrial products.
14
Latest year available.
15
See, for example, productivity data from the Groningen Growth Development Centre or the
International Labor Organization. Productivity has grown modestly in relation to emerging
countries – between 2000 and 2009, productivity (measured by total factor productivity) grew
approximately 0.4% per year in Brazil, while in China and India it grew 5.2% and 2.8%,
respectively (Wilson 2011).
16
See Barro and Lee (2010) database.
17
According to a study conducted by CNI, some 85% of companies indicate that poor quality of
elementary education is the main obstacle for skills development (A Falta de Qualificação dos
Trabalhadores da Indústria, CNI, April 2011).
18
19. At the same time that manufacturing requires more human capital, the supply of
skilled workers has not kept up with demand, increasing the workforce deficit. In
fact, the lack of skilled workers is identified as an issue for 69% of industrial
companies, pushing wages up thus harming mainly smaller companies. For
industry, which is directly exposed to international competition, the combination
of slow growth in labor productivity and rising labor costs compromises
competitiveness, especially in labor-intensive sectors.
Three simultaneous factors help explain the significant increase in the real
wage in the private sector from 2005 to 2011. The first factor is the heating up
of the economy. The second is the limited supply of skilled workers. The third
factor, and perhaps the most important, is the slowdown in the growth rate of
the working-age population resulting from a profound demographic change in
Brazil (Arbache 2011).
In fact, the cost in dollars of the labor-hour in Brazil’s manufacturing sector
increased from US$ 5.02 in 2005 to US$ 10.08 in 2010, a substantial rise for
international standards (see Chart 19).18 In 2010, labor costs in the
manufacturing sector were already higher than those in Poland and Taiwan (two
countries whose average years of education and whose workers’ skills are well
above those in Brazil), and were much higher than those in China and Mexico,
countries with which Brazilian industry competes directly for markets.
Considering the recent developments in labor productivity and wages in Brazil,
it is reasonable to assume that there has been a significant increase in unit
labor cost (ULC). In fact, Bonelli and Pinheiro (2012) show that between 2005
and 2008, the ULC increased approximately 19% per year and, from 2009 to
2011, rose 11.5%. According to these authors, this increase resulted from three
factors: the rise of real labor costs in Brazilian reais, the appreciation of the
exchange rate, and the stagnation of labor productivity. Along the same lines,
Arbache and Burns (2012) show that there was a significant increase in the
participation of labor costs in total costs for industrial companies, especially in
labor-intensive industries, such as apparel and clothing, leather and footwear,
wood products and miscellaneous goods.
18
2010 is the latest year available.
19
20. Chart 19: Hourly manufacturing labor cost (US$ - include wages and payroll taxes) and growht (%)
Source: US Labor Bureau
133,3
25 140
120
19,1
101,1
20
16,6
100
15,1
13,2
15
80
11,7
2005
10,1
2010
9,4
60
46,4
44,2
10
8,4
Growth rate
8,0
7,9
6,2
5,6 40
5,5
24,7
5,0
5
11,0
20
9,9
1,4
5,4
0,6
0 0
Taiwan Korea Mexico Portugal Singapore Poland Brazil China
The heating up of the labor market in recent years and the lack of skilled labor
also contributed not only to increasing the labor turnover, but also to revealing
the labor law obstacles to manufacturing competitiveness. On the one hand,
legislation encourages workers to look for immediate extra earnings when they
change jobs. On the other hand, strict legislation regarding the adjustment of
working hours and shifts when the economic cycle dwindles encourages
dismissals (Gonzaga 1997). The problem is that the labor turnover is not neutral
in terms of productivity and costs, as it discourages company investment in
training and, for workers, it discourages commitment to the company and
career. According to the Ministry of Labor, the turnover rate, which is already
one of the highest in the world, has increased 30% since 2006, while the
percentage of professionals in the same job for more than five years has been
decreasing.
Another obstacle to manufacturing competitiveness is the poor numbers in the
adoption of new technologies and investment in innovation. Indicators of
PINTEC-IBGE show that Brazilian companies not only invest little in innovation,
but most of those who do in fact invest, do so by acquiring machinery and
equipment. As a result, companies tend to operate in more competitive and
"commoditized" markets, in which little or no extra compensation at all is
received.19
There is also evidence that new equipment does not always work at its optimum
speed nor with the best output due to factors ranging from inadequate training
of workers to variations in electrical current. Among the main consequences of
19
Economic literature emphasizes that technology and innovation policies should be the main
element of public policies to foster diversification and strengthening of industrial activity,
especially in countries that aim to reduce the technological discrepancy in an era in which
catching-up becomes harder due to the constant and swift evolution of the technological
paradigm (e.g. Dahlman 2012).
20
21. low investment in innovation is the large and growing trade deficit for
manufactured goods of high and mid-high technology, as previously discussed,
and the drop in exports of high-technology products, which went from 9.3% of
total exports in 2005 to a mere 6.2% in 2011.
Finally, the lack of access to financing, high interest rates and an appreciated
exchange rate complement those other obstacles to industrial competitiveness.
Although interest rates have fallen significantly since the beginning of 2012,
they are still high compared to world standards, compromising investments and
the financial health of companies, especially small and medium-sized
enterprises. In fact, PIA data show that financial services are one of industry’s
most important cost items (Arbache and Burns 2012). The appreciation of the
exchange rate of more than 46% since 2003, on the other hand, significantly
altered relative prices in favor of imported products, affecting international
competitiveness and the profitability of industrial investment.
5. The new challenges faced by the Brazilian industry
Brazilian industry has at least six emerging challenges that are likely to
influence its destiny. The first challenge is related to demographic changes.
Brazil is undergoing one of the most rapid demographic changes of the post-
war period, and its effects are already being felt in the declining growth rate of
the working-age population. Estimates from the IBGE indicate that growth in the
PIA will be very low or even zero from mid-2020. This demographic change is
already affecting the general competitiveness of the economy and especially
that of industry, notably through the pressure it places on the labor market in a
context of low growth of labor productivity (Arbache 2011).
The second challenge is related to the entry of Asian countries, such as India,
Vietnam and Indonesia, and African countries in the mass manufacturing sector
encouraged not only by growth in domestic markets, but also by the increase in
labor costs in China, and by multinationals seeking geographical diversification
of production.20 China, in its turn, will increasingly invest in these regions to
mass produce while it is undergoing a technological upgrade.
The third challenge is associated to this technological upgrade in China.21 China
has made remarkable achievements in areas as diverse as space technology,
20
India is developing an ambitious industrial policy, the National Manufacturing Policy, which
aims high at the international level in several sectors. African countries, even with all their
problems, have increasingly participated in manufacturing in a more active way. An example of
that is the growing shoe industry in Ethiopia.
21
Science and technology became fundamental chapters in the 11th and 12th National
Development Plans (FYP) and gained more focus with the Medium and Long-Term Plan for
21
22. supercomputers, nanotechnology, mechanical industry and medicine. With
technological advancement, China’s exports are moving up in the value chain
and competing with developed countries – exports of capital goods might
surpass Germany in 2012, having already left Japanese exports in the dust.22
The fourth challenge is associated with new technologies and increased
investments in manufacturing in developed countries. After decades of lacking
interest, the US began paying attention to industry again, and the sector is
already one of the main contributors to growth in product and employment in the
country (Helper et al 2012).23 Backed by heterodox monetary and industrial
policies, as well as new manufacturing technologies, new shale gas
technologies, and rising labor costs in China, US industrial investments and
exports are increasing and this is already having an effect even in Brazil – the
bilateral trade balance of manufactured goods moved from historically positive
in favor of Brazil to strongly negative. Although labor costs in the US are much
higher than in developing countries, it seems that the use of sophisticated
technologies, such as 3D printing and robotics, coupled with high labor
productivity, has offset the cost differential and is helping to put the country
back on the industry map.24
The fifth challenge is protectionism. Employing State capitalism policies is
becoming popular worldwide as the economic crisis and uncertainties worsen.
China’s State capitalism coupled with the failure of ultra-liberal economic
policies, like those adopted by the US even before the financial crisis, have
encouraged policymakers to reconsider the use of protectionist measures and
market intervention to favor domestic companies. While it is understandable
that State capitalism is politically attractive in a context of economic crisis, its
multiplication on a global scale will have harmful implications on trade and
economic growth, worsening the already strongly asymmetric competition
National Science and Technology Development (2006-2020). China has vast ambitions and
intends to lead technologies in several areas over the next few decades.
22
China is now the world’s leader in manufacturing output, with 19.8% of total production in
2011, having surpassed the US, which is now home of 18% of total output (Marsh 2012).
According with Freire (2011), China is the country that has experienced the largest
improvement in productive capacity in the last 25 years. Productive capacity is the set of
capabilities available in a country to produce and market its output of goods and services.
These capabilities include resource endowments (i.e. labor, physical capital, human capital,
land), total factor productivity, mechanisms for the allocation of these endowments to specific
uses, and any other factor that contributes to maximizing the output of the economy, including
trade and transport integration, institutions, policies and regulations (Freire 2011).
23
Over the last few years the US government has introduced several policies and instruments
to offer support to recover and strengthen industry, such as 2010’s National Manufacturing
Strategy, as well as fiscal stimulus policies to bring back American companies set up abroad.
24
Because of these technological advances, product customization, rising expenses of
manufacturing in emerging economies and other problems, Marsh (2012) argues of a “New
Industrial Revolution”, in which the opportunities for emerging economies to participate in and to
catch up with manufacturing output in developed countries are beginning to level out.
22
23. conditions. Boosting the manufacturing sector in such an environment will be
harder.
The sixth challenge is the rising commodities’ revenues and their potential
impacts on exchange rate appreciation, an issue that will probably become
more noticeable when the pre-salt oil layer starts to flow into the market.
The challenges associated with the new geography of production will redesign
the global economy and the consequences will be immense. Immediately, there
will be increasing competition. In the mid-term, there will be deep-seated and
significant changes not only in global production sectors, but also in the global
networks for innovation, international trade, capital flows as well as job creation
and income. This complex transformation process will increase the pressure on
Brazilian industry and force the country to implement policies and actions
needed to significantly lift competitiveness.
Likely consequences arising from the first and second challenges for Brazilian
industry include an increase in production costs and heated competition in
labor-intensive industries. To mitigate the potential effects of these challenges,
industry will have to invest heavily in the use of technologies that save labor and
in innovations to foster a technological and market upgrade.
Likely consequences arising from the third and fourth challenges include an
increase in competition in international markets in general, and in the medium
and high value added markets in particular. If, on one hand, China opens up
space for other economies to produce lower value-added manufactured
products, on the other hand, it will increase competition in markets for goods of
higher value added, including aircraft, capital goods, chemicals, and
telecommunications, sectors that Brazil already holds market share and aims to
expand its presence. For the country to participate more intensively in these
markets, it will be necessary to substantially increase investments in
productivity, efficiency and innovation, and to prioritize investments in sectors
and niche markets.
The probable outcome from the fifth challenge will be the harmful effects arising
from the fallacy of composition of State capitalist policies, egging on mercantilist
wars and political tensions among countries. In this environment, industries in
countries with greater political strength and power to affect markets and
influence institutions, such as the United States, the European Union and
China, will tend to be favored.25
25
The Brazilian industry will need to tackle the challenges associated with the rising
commodities’ revenues and their potential impacts on exchange rate. This issue will probably
become more noticeable when the Pre-Salt oil starts to get in into the market.
23