ELECTRICAL AND ELECTRONICAL
INDUSTRY BEHAVIOR IN 2010
Sector´s Performance
The Electrical and Electronic industry revenues in 2010, must reach R$ 124 billions, representing 11% growth related to 2009 (R$ 112 billion). In comparison to 2008, pre-crisis period, the increase was less than 1%, and the sector’s performance registered R$ 123 billions.
2010 results were below expectations, since, considering GIP growth of about 7.3% this year, the sector’s revenues should grow at least 15%.
This fact is justified; first, by the Real valorization compared with the US Dollar, of about 13%, what generated an increasing competition among the sector’s products, in the external and internal market.
The sales of electrical and electronic products to foreign markets must add US$ 7.75 billions, 4% above last year, although when the amounts are converted to Reais, there is a decrease of 9%. Because of that, the exports participation in the total industry invoicing will change from 13.4% in 2009 to 11.0% in 2010.
On the other hand, imports must grow 41% in US Dollars, from US$ 25 billions, in 2009, to US$ 35 billions, this year that, in Reais, represents an increase of 25%.
According to the graph below, if we consider only the electrical electronic final goods, the participation of imports in the internal market will increase, from 20.4% in 2009 to 21.5% in 2010.
The downside of 9% registered in the Telecommunication area business affected, significantly, the sector’s revenues, due to the downturn of investments in telephony infrastructure, especially mobile (estimated in 15%), and to the small drop (2%) on mobile phones market.
Specifically on mobile phones, the production of these devices must reach 61 millions units in 2010, slightly below 2009 (62 millions of devices). Out of this number, 47 millions were assigned to the internal market (46 millions in 2009) and 14 millions to foreign markets (downside of 2 millions compared to 2009).
By sector, the IT segment (+13%), Electrical Material for Wiring (+12%), and Domestic Appliances (+16%), showed expressive increases under strong influence of internal consumption growth.
The government actions to protect the economy of the country against the world economical crisis like keeping consumers’ credit, and the income and employment rate increases, generate a positive influence for the electrical electronic products’ market.
Also the IPI (Industrialized Products Tax) reduction for domestic appliances, ruling until January 2010, and the inputs for civil construction, initially ruling till the end of 2010 and now extended for one more year, were essential for the electrical electronic segment. For the IT segment, the reduction of PIS/COFINS was very important.
This year the number of Private Computers in Brazil will reach 14 millions of units, surpassing last year results (12 millions) in 17%. 70% of this number represents the official market.
The Wiring Electrical Materials’ Sector was affected by the civil construction industry growth, motivated by the program My House My Life – although there was a delay in the chronogram – and also by the investments of private construction companies, with bank resources, especially from BNDES.
Emphasis should be made to the market of electrical products for improvements and own constructions, registering an increase motivated by population income increase resulting in investments in home quality improvement.
Also registered significant growth increases: Capital Goods for Electrical Electronic Sector’s segment like Industrial Automation (+7%) and Industrial Equipments (+22%)
The short production cycle equipment (serials) affected these sectors’ performances. The long cycle products (by purchase order) didn’t have the same good performance, as they depend upon large projections or implementation of new plants, segments showing retraction for this year.
We should also highlight the importance of Federal and State Government incentives for the capital goods industry, offering resources for investments, which allow the investors to promote the increase of their activities in adequate conditions.
For the Generation, Transmission and Distribution of Electric Power (+14%), it was noted, during 2010, the retake of investments in infrastructure and distribution of electric power, due to the consumption increase, mainly in the industrial area, as well as the continuity of the program “Light for All”.
Also the investments in Generation and Transmission of Electric Power were kept, including those established by PAC – Growth Acceleration Program – of Federal Government.
Besides, the sector is concerned with the increase of the participation of imported equipment in the bids for purchasing equipments destined to large projects contained in the PAC, for instance, in the Generation of Electric Power for the complex Rio Madeira and for the Transmission Line Tucuruí-Manaus, both projects with large participation of foreign suppliers.
The local electrical equipment industries have double disadvantage in the public bids. They lose the bids because of the exchange rates and also because of the incentives given to capital goods imports for investments in Amazonia, established by Enactment nr. 356 of 1968 which foresees the discharge of federal taxes (among them, the import tax). The impact of these imports and the consequences on local production will only be acknowledged in a near future, when the contracts will be effectively closed and accounted for the statistics of the Ministry of Development, Industry and Foreign.
Regarding the Electrical and Electronic Components, the sales increase in 2010, related to 2009, was 13%, reaching R$ 9.4 billions. This performance is due to the evolution of the main markets of the segment in Brazil, like capital goods (power diodes), domestic appliances (capacitors) and automotive industry (electromechanical components). The increase was also caused by the lack of these electronic components in the world market.
The increase of the electrical electronic sector this year can be verified also, by the number of direct employees that will jump from 160 thousand, at the end of 2009 to 175 thousand employees, at the end of 2010, generating 15 thousand new jobs.
The investments in fixed assets to increase production remained a the same level of 2009, representing 3% of the amount billed by the industry (R$ 3.6 billions).
2011 Projections
For 2011, the forecast shows an increase of 13% compared to 2010, reaching R$ 140 billions.
The favorable environment for consumption derived from the worker’s income maintenance, the higher level of labor occupation and the maintenance of private and public investments will contribute to this projection.
At the same time, it is expected the retake of investments in Telecommunications Infrastructure, as well as the continuity of investments in Generation, Transmission and Distribution of Electric Power.
The IT sector will count with the extension, until 2014, of the PIS/COFINS exemptions for PCs.
The civil construction sector will remain as government priority, generating business in the segment of Electric Material for Wirings.
The internal market will continue to be the main target of the companies in the next year, since the competitive difficulties due to the exchange rates will remain.
Accordingly, the exports must keep the same performance of 2010, US$ 7.8 billions, while the imports will increase around 17% reaching the amount of US$ 41.2 billions.
The employment rate increase trend must be kept, reaching 178 thousand employees at the end of 2011.
The investments of the electrical electronic industry will probably reach US$ 5.3 billions, around 4% of the sector’s invoicing.
Abinee/Decon – 30/11/2010