Over the last 20 years, the growing global economy has allowed manufacturers to enter new markets to serve an increasingly global customer base while also shortening supply chains and reducing cost structures.
Global Economy, Competitiveness, Government Policy, Economic Environment, Recession
Brazil’s economy and manufacturing are in a technical recession, inflation is higher than desirable, and public finances are deteriorating. The country’s short-term outlook appears depressing, as the ongoing macroeconomic imbalances will have to be addressed by orthodox policies, which will in turn bring muted growth and rising unemployment.
Global Economy, Economic Environment, Labor, Money & Finance, GDP
For years, protectionist policies helped Brazil build a fortress around its manufacturing base, which profited from a rapidly expanding domestic market over the past decade. Ever-rising purchasing power and the best credit conditions in decades fueled the demand for durable goods and housing, in turn stimulating most intermediate industries. A sort of virtuous cycle led to a broad-based manufacturing expansion that was interrupted in the wake of the 2008 global economic crisis. It took Brazilian factories more than a year to recover pre-crisis output levels, and manufacturing subsequently stopped growing. Three years have passed without genuine manufacturing growth in Brazil, despite the government’s protectionist stance that is ingrained in every sector of the economy.