The year of 2012 is viewed with optimism by 335 large businesses surveyed by EXAME. To them, only a China stumble can spoil the party in Brazil - Marcio Kroehn
In recent weeks, amid uncertainty not only about the impact the crisis will have on Greece and on the global economy, but also concerning new plans conceived to rescue countries and financial institutions, EXAME conducted a survey on the scenario envisioned for businesses and for the Brazilian economy during 2012. Taking part in the study were 335 companies operating in Brazil, with sales ranging from 100 million to 210 billion Dollars and representing the various
If there is a worsening in the international crisis, many plans can be changed. However, for now, what concerns the companies most is rising operating costs
THERE IS NO WAY TO PREDICT THE EFFECT OF A SLOWING ECONOMY IN CHINA, WHICH IS EXPECTED TO GROW 7%
areas of activity: industry, commerce, services and agribusiness. Despite the bad news coming from abroad, the answers show that while the euphoria experienced in 2010 is behind us now, there is still optimism - albeit moderate - for Brazil in the coming months. Most companies said they expect reasonable growth for the country, between 3% and 5% in 2012. And, particularly concerning their own business, their forecasts are even better, with growth above 5%.
Behind the relative confidence of the companies, Brazil still has a set of positive indicators, despite the gradual reduction of the dynamics seen in recent months. The first is the level of employment, now at a historic high and accompanied by an increase in income - the workers' average income has surged more than 20% in the last eight years. "The low unemployment rate is the main factor sustaining the current Brazilian growth," says economist Regis Bonelli, from the Getúlio Vargas Foundation in Rio de Janeiro. "In the coming months, there may be a slight increase in that rate, but nothing that will substantially alter the current scenario. The economy will continue heated. " With the upward mobility of tens of millions of people, Brazil has become a country of the middle class. A middle class that has not lost the urge to consume.
MORE FOREIGN INVESTMENT
The impulse that has taken over household consumption in Brazil today represents a potential of 2.4 billion Dollars per year in spending on food, clothes, cars, buildings and a multitude of services. It is a contrasting scenario with the sense of disillusionment that has blanketed the European market
The business performance scenario is positive for now. Most see the prospect of increased profitability and maintenance of credit
and the scene of many questions that still cast shadows the U.S. economy. Despite disappointment and doubt, capital still tends to flow to where there is hope for a better future than the present. This year, foreign investments in production in Brazil are expected to set a new record, at 70 billion Dollars. "We do not foresee a slump in the country's economic activity in the short term," says Carlos Terepins, CEO of the São Paulo-based Even developer. With the launch of 16 buildings in São Paulo, Rio de Janeiro, Minas Gerais and Rio Grande do Sul, Even's net income rose 4% in the first half of the year over a year ago, topping at 858 million Reais.
The Brazilian entrepreneurs' optimism is not unlimited, of course. And they surface in old bottlenecks in our economy and in the surprises that may linger in the world crisis. Among the obstacles that are of our own doing are the chronic shortage of skilled labor, resulting from the weakness of our educational system, and the successive increases in labor costs (see the report on pg. 40). Uncontrolled costs appear as the top concern among most of the companies that were surveyed. "The price stability that has reigned for three years has vanished. It is worrisome to allow inflation surge to a level that is harmful to the worker," says Romeo Zema Neto, CEO of Zema, a group with annual sales of 1.6 billion Reais and more than 300 consumer electronics stores in the state of Minas Gerais.
On the foreign front, the biggest concerns do not involve Europe or the United States, rather a possible contamination of the Chinese economy, today a sort of Siamese twin of Brazil. In recent years, China has become the customer of iron ore, soybeans and other commodities that make the Brazilian trade balance positive. "The fate of the Chinese economy is currently more important to Brazil than the European slowdown," said Caio Megale, an economist at Itaú Unibanco. "If the Chinese step hard on the brakes, it is hard to predict the consequences for the rest of the world." Most economists are still projecting a growth of over 7% in China's economy in 2012. To keep the Brazilian optimism from being frustrated, it is worthwhile to root for those who live on the other side the world.
