BRASILIA: Roughly 60 percent of companies in Brazil’s manufacturing sector have taken steps in recent months to reduce production, including lying off workers and putting others on involuntary leave, according to a report published.
The study by Brazil’s National Confederation of Industry, or CNI, says the biggest reductions in labor usage have occurred in the automotive sector, where 78 percent of companies have laid off employees permanently or temporarily or reduced their work hours.
In other transportation-related areas, such as aviation and shipyards, 73 percent of companies have adopted these kinds of measures, the CNI said.
At least 36 percent of manufacturing companies are planning new layoffs in the coming months and 17 percent will be presenting their workers with different plans for a larger reduction in the work day, the study said.
The report is based on a survey of 2,307 companies – 544 large corporations, 835 medium-sized enterprises and 928 small firms – conducted in the first half of April, the CNI added.
Those measures are a consequence of the country’s delicate economic situation, high inflation and the drop in consumers’ purchasing power, the study said.
Brazil’s domestic market has been affected by austerity measures enacted after federal, state and local governments ended 2014 with a cumulative primary budget deficit (before interest payments) equivalent to around $12.5 billion.
The government and the private sector are both projecting Brazil’s economy will shrink by at least 1.2 percent this year, and the country’s economic woes have already been reflected in the unemployment rate, which climbed to 6.7 percent in May after the fifth straight monthly rise in that indicator.
