Aécio Amado
Reporter - Agência Brasil

Rio - Brazilian entrepreneurs believe that the pace of industrial activity continues to be sluggish at the start of this year, but they forecast that business will pick up in the coming months. Nevertheless, the number of new workers hired is expected to remain in check. These are among the perspectives revealed by the 158th Quarterly Survey of Manufacturing Industry, released yesterday (12) by the Getúlio Vargas Foundation (FGV). According to the study, 22% of the entrepreneurs are dissatisfied with the current business situation at the beginning of 2006, as against 16% who think business is "good."

The survey indicates that the sector is also pessimistic about the demand for industrial goods, both domestically and abroad. The level of demand at the beginning of January is considered weak by 20% and strong by only 9%. As regards their outlook for the next three months, the preliminary results of the study suggest that, on the average, they are more optimistic than they were when the last survey was conducted, in October, 2005, except when it comes to the question of jobs.

In the first quarter of this year, 32% of the entrepreneurs expect to eliminate jobs, while only 11% intend to add to their workforce. Despite this pessimism about hiring more workers, there is hope that industry's business prospects will improve in a 6-month time frame. Of the 489 firms interviewed for the survey, 55% believe that business will get better, while only 12% expect things to get worse.

The entrepreneurs reflect optimism regarding production: 38% think that industrial production in Brazil will increase in the three months from January to March, while 34% expect a reduction. The FGV's 158th Conjunctural Survey of the Manufacturing Industry gathered data from the 489 firms between December 29 and January 10. The companies included in the study account for US$ 86.4 billion in annual sales and employ approximately 513.9 thousand workers.

Translation: David Silberstein