Nov 16, 2011

Brazilian Industry: Production vs Employment

Last week, IBGE (Brazilian Institute of Geography and Statistics) released data about employment in the industrial sector. The research is conducted in 18 major industrial activities and showed a decrease of 0.4% in September over the previous month. The following chart shows the relationship between output and employment growth in the industry. While the industry output had an annual average growth of 2% between December 2000 and September 2011, the employment grew by only 0.36% per year. Another important point is that industrial production recovered from the crisis of 2009 and it is just 1.5% below the maximum level, while the employment rate is still below 4%. Both industrial production and employment in the industry had a very poor performance in this period, and the main explanation for this performance was the appreciation of the Brazilian Real against the dollar, especially in the period after 2009, which meant that the industry suffered a very strong competition from imported goods.

Source: IBGE

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