Ivan Richard
Reporter - Agência Brasil
Brasília - The results of the Industrial Survey released by the National Confederation of Industry (CNI) reveal two distinct realities, differentiating the country's large companies from its medium and small ones in the first quarter. While the large companies showed slight gains in production and stable levels of sales and employment in the first three months of the year in relation to the fourth quarter of 2005, the small and medium-sized ones registered declines in all three areas.
According to the executive manager of the CNI's Economic Policy Unit, economist Carlos Castelo Branco, the biggest problems faced by the small and medium-sized firms were the heavy tax burden - a problem shared with their larger counterparts - and weak demand and fierce competition on the domestic market - while exports boosted the business of the large firms.
The study also found that capacity usage dropped to 71% in the first quarter, as against 75% in the final quarter of 2005. Since there was an increase in production and a reduction in capacity usage in the large companies over the period, this means that they made investments in expansion and modernization. There is still room for production to grow during the course of 2006, according to the CNI.
Translation: David Silberstein