According to Iedi, Brazilian industry got smaller and smaller in the last 50 years

A survey by the Institute for Industrial Development Studies (Iedi) indicated that Brazil had the third-largest retraction in the industrial sector among 30 countries since 1970, trailing only Australia and the United Kingdom.

Industrial production, the main factor in the development of a country, has lost more space in the Brazilian productive structure. Currently, this sector presents numbers at the same levels as those of the 1910s.

According to the IBGE, after two years of growth, Brazilian industrial production fell by 1.1% in 2019. In the last 50 years, the participation of the Brazilian industrial sector in the national GDP has shrunk from 21.4% to 12.6%.

The El País website reports that "data released this Wednesday (March 4, 2020) reveal that the crisis that has been going on in the Brazilian industry for years has shown no signs of improvement. In the last three months of last year, the industrial sector remained stagnant and advanced 0.1% compared to the previous period.

According to El País, "the retraction further reinforces the downward trend in the participation of the manufacturing industry, responsible for converting raw materials into production and consumption goods, in GDP in recent years. In 2019, the sector that encompasses the plastics, food, beverages, metallurgy, textile industry, among others, represented only 11% of economic activity. Two decades ago, activity accounted for more than 15% of GDP. In 1970, the participation was 21.4%".

Industrial production in Brazil falls 0.6% in June 2019 and has a second negative month in a row

Brazilian industry fell by 0.6% in June 2019, following a decrease of 0.1% in May 2019. The loss of pace in the sector reflects the reduction in production in 17 out of 26 activities and in all major economic categories of goods. intermediary, consumer, and capital markets.

The Brazilian industrial sector accounted for 25% of GDP in 1985. Now represents about 13%.

According to the website O Cafezinho, for the Institute for Industrial Development Studies (IEDI), between 1980 and 2017, the Brazilian manufacturing industry grew by only 24%, while the world industry grew by 204% and the world excluding China increased by 135%. The United States grew at the same pace as the world outside China. Most developing countries grew above the world economy and most developed countries below. The Chinese case is unique because China has increased the size of its industrial park by more than 40 times. South Korea has increased 17 times, Indonesia and India 12 times, Malaysia and Ireland 11 times.

To Ha-Joon Chang, professor of economics at Cambridge University, "Brazil is experiencing one of the largest deindustrializations in the history of economics."

The participation of industry in the Brazilian GDP has been falling since 1986. It is deeply necessary for Brazil to grow again, to combat poverty again and to stop deindustrialization.

The government needs to re-engage in an industrial policy aimed, for example, at the Oil and Gas industries, the health industrial complex, the agribusiness industry (creating a favorable scenario for the emergence of industries of agricultural supplements, fertilizers, etc.), integrating the Brazilian industry with the whole of international trade.

Iedi points to Brazilian GDP growth below 1% in 2019

The Institute for Studies in Industrial Development (Iedi) of Brazil has published an expectation that the Brazilian Gross Domestic Product (GDP) should grow less than 1% in 2019. The industry should perform even worse, with retraction around 2% in 2019.

According to the Iedi Executive Director, Julio Gomes de Almeida, "there is no factor to change" this conjuncture in the short term. For him, the high level of unemployment in the country prevents a stronger growth of economic activity.

Almeida says that even if the Brazilian Central Bank (BC) reduces the Selic rate, which is currently at 6.5% per year, these measures would only show some result in 2020. This, coupled with the low competitiveness of Brazilian industry, our low levels of productivity and the crisis that currently affects Argentina, Brazil's main trading partner in the region, makes the scenario even more worrying.

In the comparison of the first quarter of 2019 with the same period in 2018, the four segments of manufacturing Brazilian industry fell: capital goods industry (-4.3%), durables industry (-3.5%), intermediate processing industry (-2%), and semi-durable industry (-1.4%). The decline of the general industry in Brazil, in turn, was 2.3%.

To make matters worse, the construction sector cut 12,648 jobs in March in Brazil.