According to the Brazilian association of machinery and equipment producers, ABIMAQ, the sector’s sales revenues have declined by 6.4 percent in January, when compared to January 2022.
ABIMAQ mentioned that the sector is facing a difficult situation, as this is the eighth consecutive month of declining revenues.
The problem derives from the reduction of the production capacity of the sector, which operated in January at a 75.5 percent production pace, a level considered as low in historical terms.
The decline of the production activities, chiefly those related to agriculture, resulted in a reduction of investments in the machinery and equipment industry over the last months, including January 2023.
ABIMAQ added that 2023 is pointing to the lowest performance of the sector in three years, reinforcing the perception that the sector is losing momentum, a problem that could be reversed if the performance of the domestic economy improves if more financial credit is available and if production costs are reduced.
In recent years, ABIMAQ has complained about the price of steel products acquired by the sector, usually showing a premium of 10 percent in relation to the international markets, sometimes reaching up to 40 percent.
Despite the negative situation, 2022 has seen an increase of exports of all types of machinery, reaching $12.2 billion, a 21 percent increase from 2021. Exports of agriculture machinery alone have increased by 32 percent during the period.