Brazil's production of IT, electronics and optical equipment takes a hit

Hit by macroeconomic, supply and logistics woes, the production of IT, electronics and optical equipment fell the most in November among all categories analyzed by Brazil’s statistics bureau IBGE.

Overall industrial production fell 0.1% in November compared to the previous month, IBGE reported.

Of the 26 lines of products reviewed by the agency, 11 reported drops – with IT, electronics and optical equipment tumbling 6.5%. The monthly rather than annual comparison is stressed by IBGE when reporting industrial production.

Inflation, high interest rates, delays in components affecting production, greater indebtedness of families and companies, as well as lower demand for products after the boom in electronics and IT devices during the pandemic, help explain the decline in the segment.

In 2021, sales of computers, among other electronic consumer goods, increased above average due to remote work and distance learning.

“For this reason, the performance of 2022 was less expressive, as there was an anticipation of purchases,” Humberto Barbato, president of the Brazilian electrical-electronics trade group Abinee, said recently in a press conference in São Paulo.

In the annual comparison, Brazil's overall industrial output grew 0.9% in November, the fourth consecutive increase. Year-to-November, production declined 0.6% and, in the accumulated 12 months, the drop was of 1%.

The Brazilian electrical-electronics industry projects nominal growth of 5% in sales in 2023 to around 231bn reais (US$43.7bn). In real terms, sales are set to be flat, Abinee said.

It also projects a 1% increase in electrical-electronics industrial production this year. In its latest survey in November, 60% of its members who responded said they expect their sales to grow this year, Abinee reported in a release.

However, just 45% of those responding said their sales/orders had grown compared to November 2021, down from 62% in the September survey and 56% in October.

There was also an increase in those reporting lower sales/orders, to 35% in November from 25% in September.

SEMICONDUCTORS

Specifically in the case of semiconductors, 60% of Abinee's members who use these components in their production lines reported in November difficulties in acquiring the items on the market – one percentage point below the previous survey.

Abinee also said 33% of companies expect supplies to return to normal in the second half of 2023 or the first months of 2024.