The industrial indicators for July show that manufacturing activity keeps trending downward early in the second half of the year. All indicators experienced a drop between June and July in the seasonally adjusted series. The main highlight is the 4.3% decline in real sales in industry, which comes after a partial recovery in June from a significant fall in May.

Industrial sales fall again in July

Industrial indicators - July 2016 Seasonally adjusted change from June 2016

Ç REAL SALES Down by 4.3%

Ç HOURS WORKED IN PRODUCTION Down by 0.2%Indústria Petrolífera

Indústria Química

Pequena Média Grande

Indústrias Diversas

Indústria da Construção Indústria de Energia

Ç CAPACITY UTILIZATIONDown by 0.3 percentage points

The other seasonally adjusted indicators confirm that manufacturing activity remains sluggish. Hours worked are down again (-0.2%) and so is capacity utilization, which fell by 0.3 percentage points in July to 76.9%. As a result, the labor market continued to contract, with both employment and total payroll falling.

Ç EMPLOYMENTDown by 0.4%

Ç REAL TOTAL PAYROLL Down by 0.9%

Ç REAL AVERAGE EARNINGSDown by 0.3%

CNI IndicatorsISSN 1983-621X • Year 18 • Number 7 • July 2016

INDUSTRIAL INDICATORS

2

Industrial indicatorsISSN 1983-621X • Year 18 • Number 7 • July 2016

Hours worked fall in July Hours worked in production recorded a 0.2% decline in July from the previous month on a seasonally adjusted basis. As compared to last year, the indicator is down by 7.6% in July and by 9.3% in the first seven months of the year.

Hours worked in productionSeasonally adjusted (Fixed-base index: 2006 average = 100)

Employment keeps trending downward

Industrial employment continued on the downward trend initiated in February 2015. In July, the indicator shrank by 0.4% from the previous month and by 7.7% from the same month in 2015, both in the seasonally adjusted series. In the first seven months of 2016, jobs are down by 8.9% on a year-on-year basis.

EmploymentSeasonally adjusted (fixed-base index: 2006 average = 100)

Real sales drop significantly in July

After growing in June, real sales in manufacturing edged down by 4.3% in July on a seasonally adjusted month-over-month basis. Compared with 2015, the index is down by 15% in July and by 12% in the year.

Real SalesSeasonally adjusted (fixed-base index: 2006 average = 100)

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

107

117

127

137

101

105

109

113

117

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

90

95

100

105

110

115

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

3

Industrial indicatorsISSN 1983-621X • Year 18 • Number 7 • July 2016

77

79

81

83

85

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

Average earnings down in the month

Real average earnings

Real average earnings fell by 0.3% in July from the month before and by 0.8% from July 2015. In the first seven months of 2016, the indicator is down by 0.9% on a year-over-year basis.

Seasonally adjusted (Fixed-base index: 2006 average = 100)

Deflator: INPC-IBGE

Capacity utilization hits historic low

Capacity utilizationSeasonally adjusted (average percentage)

Deflator: INPC-IBGE

In July, capacity utilization hit an all-time low in the historical series after reaching 76.9% in the seasonally adjusted series. As compared to July 2015, the indicator is down by 1.6 percentage points.

76.9%

Indústria Petrolífera

Indústria Química

Pequena Média Grande

Indústrias Diversas

Indústria da Construção Indústria de Energia

Real total payroll falls for third month straightTotal payroll decreased by 0.9% between June and July, marking the third consecutive decline in the indicator. Compared with last year, total payroll is down by 8.4% in July and by 9.7% in the year.

Real total payrollSeasonally-adjusted (Fixed-base index: 2006 average = 100)

Deflator: INPC-IBGE

115

120

125

130

135

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

112

114

116

118

120

Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16

Industrial indicatorsISSN 1983-621X • Year 18 • Number 7 • July 2016

1 Deflator: IPA/OG-FGV - 2 Deflator: INPC-IBGE

PERCENTAGE CHANGE JUL 2016 / JUN 2016

JUL 2016 / JUN 2016

SEASONALLY ADJUSTED

JUL 16 / JUL 15

JAN-JUL 16/ JAN-JUL 15

Real sales1 -6.5 -4.3 -15.0 -12.0

Worked hours in production -0.2 -0.2 -7.6 -9.3

Employment -0.4 -0.4 -7.7 -8.9

Real total payroll2 0.1 -0.9 -8.4 -9.7

Real average earnings2 0.5 -0.3 -0.8 -0.9

AVERAGE PERCENTAGE JUL16 JUN16 JUL15

Capacity utilization 77.2 77.6 78.8

Capacity utilization - Seasonally adjusted 76.9 77.2 78.6

INDUSTRIAL INDICATORS | English version of “Indicadores Industriais Julho/2016” | Monthly Publication of the National Confederation of Industry - CNI | www.cni.org.br | Policy and Strategy Unit - DIRPE | Economic Policy Unit - PEC | Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Team: Flávia Junqueira Ferraz, Edson Velloso and Priscila Garcia | CNI Publishing Center | Graphic design supervision: Alisson Costa | Customer Service - Phone: +55 (61) 3317-9992 - email: sac@cni.org.br | This publication may be copied, provided that the source is cited.

Learn more

i For more information on the survey, including historical series and methodology, kindly visit: www.cni.org.br/e_indindustriais

Resume of results - Industrial Indicators