In 2004,  716,6 thousand new companies were opened in Brazil; 529,6 thousand were extinct, and there were 187 thousand companies left. In 2004, over 45% of the companies created in 1997 had been extinct. Between 2000 and 2004, there was increase of average monthly salaries in only 3 of the 25 main economic activities: air transport, petroleum extraction and services related to water transport. Companies of trade and of  repair of automotive vehicles and personal and domestic objects companies continued as leaders in terms of number of employed persons. Although these companies employed about 25% of the employed persons, they were responsible for only 16.8% of the total of salaries paid in 2004. These are some of the data presented in the IBGE’s  Statistics of the Central Register of Enterprises .

 

In 2004, in the Central Register of Enterprises (CEMPRE), there were 5,4 million active companies and organizations with a  registration in the (National Juristic Persons File). They represented the formal segment of economy: 90.3% of them were enterprises; 0.3%, organizations of public administration and 9.4%, non-profitable organizations. They employed 37,6 million persons, among whom 30,4 million (80.8%) received salaries and 7,2 million (19.2%) were a partner or the owner of the business. In 2004, these units paid R$ 390 billon in salaries and other compensation, corresponding to an average salary of R$ 988,70.

Between 2000 and 2004, the number of salaried persons in companies increased by 23.2%, having changed from 16,8 million to 20,7 million. This meant increase by 1,1 percentage points in the relative participation of employed persons from 67.0% to 68.1%. In the same period the increase of the relative participation of salaries paid by companies was only 0.4 percentage points, from 62.7% to 63.1%. The participation of employed persons in public administration, on the other hand, had change of decreased  by 0.4 percentage points, having changed from 24.7% to 24.3% and having fallen by 0,5 percentage points in terms of salaries (from 29.9% to 29.4%).

 

Non-profit organizations did not under go any significant changes in terms of participation of in salaries, but they faced reduction of their participation in terms of salaries persons (0.7 percentage points, from 8.3% to 7.6%). The companies which concentrated 2/3 of the salaries persons and of the salaries paid in 2000 and 2004 are analyzed below ¹.  

 

Manufacturing industry maintains highest levels of participation in terms of employed persons and salaries

The three main economic activities , in relation to number of companies, employed persons and salaries in 2000 and 2004, were Manufacturing industry (biggest number of salaries and highest percentage of salaries paid), Trade and repair of automotive vehicles, personal and domestic objects retail trade of fuels (biggest number of companies) and Real estate activities, rents and services rendered to enterprises (the third position in the three variables).

The leading activity in terms of number of companies was Trade, repair of automotive vehicles, personal and domestic objects, with a little more than half of the companies both in 200 and in 2004 (54.9% and 54.1%, respectively). However, in this period, among the three activities with the biggest number of companies, only Real estate activities, rents and services rendered to enterprises had increase of participation (by 1.1 percentage points).

 

In relation to salaried persons, the leading activity was Manufacturing industry, with almost 1/3 of the salaried persons in the two years analyzed . Together, the three economic activities already mentioned accounted for over 2/3 of the employed persons in 2000 and in 2004 (67.3% , in 200 , and 69.1%, in 2004).

 

From 2000 to 2004, among the three activities highlighted, only Manufacturing industry had no increase of its relative participation in terms of salaried persons. Trade, repair of automotive vehicles, personal and domestic objects, the second main economic activity in terms of employed persons, had the biggest increase in relative participation (1.3 percentage points). The third main activity in terms of employment was Real estate activities, rents and services rendered to enterprises, which increased by 0.8 percentage points in the period.

 

Trade employed 25% of the salaried persons, but paid less than 17% of the salaries

 

In relation to salaries paid, the three main activities had at least 1.1 percentage points in participation. Financial mediation, insurance, complementary social security and related services, despite being in the eighth position in terms of salaried persons and of having faced decrease by 2.1 percentage points, was in the fifth position in the ranking of salaries paid in 2004. It was the number-two activity regarding average monthly salaries.

Manufacturing industry paid more than 1/3 of the total of salaries in the two years analyzed, and more than half of the salaries paid by the second main activity, Trade, repair of automotive vehicles, personal and domestic objects, which, despite employing about 25% of the salaried persons, paid only 15.6% of the total of salaries in 2000, and 16.8%, in 2004.

 

Financial mediation paid the highest average monthly salaries

 

The average monthly salary measured in terms of minimum wages² was reduced in all the years from 2000 to 2004. This is due, on one hand, to the reduction of the real average monthly salary by about 6.0% between 2000 and 2004³ (from R$ 979.24, in 2000, to R$ 916.52, in 2004), and, on the other hand, to the real increases of the minimum wage⁴, which, when accumulated, reached 20.7% in relation to the Extended National Consumer Price Index – IPCA – and 16.9% in relation to the Consumer Price Index – INPC⁵, from 2000 to 2004.

 

The activities Financial mediation, insurance, complementary social security and related services and Production and distribution of electricity, gas and water were, respectively, in the second and in the third positions in terms of average monthly salaries in 2000. In 2004, however, both activities had quite the same performance.

 

Manufacturing industry, with the biggest contributions to salaried persons and salaries paid, was the sixth activity in terms of value of average salary both in 2000 and in 20004, with average monthly wages of 5,4 and 4,4 minimum wages, respectively. Trade, repair of automotive vehicles, personal and domestic objects, the second in terms of salaried persons and salaries paid, was in the twelfth position regarding average monthly salary, being more than a minimum wage below the overall average, in the tow year of the analysis.   

 

The difference between the highest and the lowest average salaries is significant, by economic activity, but was a little reduced, and changed from 6.6 times in 2000 to 5.6 times in 2004. The main responsible for the decrease of this difference was the significant decrease of the highest salaries between 2000 and 2004.

 

Real average salary was reduced in all the groups of employed persons

The real average monthly salary was reduced by 6.4%, from R$ 979,24 in 2000 ,to R$ 916,52,  in 2004. This decrease was more significant in companies with 100 or more employed persons, in which the real wages fell by 7.7%. In companies with up to 29 employees and in companies with 30 to 39 employees the decreases were 0.2% and 3.1%, respectively.

  

Retail trade offered more jobs

 

In terms of number of companies, the three main categories of activities were Retail trade and repair of personal and domestic object, Services rendered mainly to enterprises and Lodging and feeding, which account for 59.0% of the companies in 2000 and 58.0% in 2004. Retail trade and repair of personal and domestic objects was the leader in 2000 and in 20004 (42.9% and 41.8% of the companies, respectively).

 

In terms of salaried persons, the three main categories of activities in 2000 were Retail trade and repair of personal and domestic products, Services rendered mainly to enterprises and Construction, which, together, employed 32.4% of the salaried persons. In 2004, the three main activities employed 34.5% of the salaried persons, but the third position was occupied by Production of food products and beverages.

 

Retail trade and repair of personal and domestic objects employed only 16.2% of the salaried persons, in 2000, and 17.3%, in 2004 (Table 3), although it accounted for over 40.0% of the companies in the period and accumulated contribution  of 1.1percentage points to the number of salaried persons.  

 

Concerning salaries paid, Retail trade and repair of personal and domestic objects, Services rendered mainly to enterprises and Financial mediation were the three main activities. Together, they accounted for about ¼ of the salaries and other compensation. Financial mediation was the main activity in terms of salaries paid in 2000; although it had been the ninth in terms of salaried persons, it was placed in the third position of this group in 2004, with the reduction by 2.0 percentage points of its relative participation.

 

Only three of the 25 main activities had rise of average salaries

 

Among the 25 main activities in relation to average monthly salary, only three had increase from 2004 to 2000: air transport, petroleum extraction and related services ad water transport. This caused these three activities had significant gains of position between 2000 and 2004: air transport moved from the sixth to the second position; petroleum extraction and related services moved from the nineteenth to the fourth position, and water transport, from the twenty-fourth to the seventh position.

  

Considering the three categories of activity in 2000, only Electricity, gas and hot water kept their position in 2004. Financial mediation, which led the ranking in 2000, fell to the sixth position in 2004 and Research and development changed from the second to the fifth position.

 

In 2004, there was a total of 187 thousand new companies

 

In 2004, 716 604 new companies were opened, which represented increase of 1 537 450 employed persons; 529 587 companies were extinct, corresponding to reduction by 991 387 employed persons and resulting in a total number of employed persons. These changes resulted in a positive figure of 187 017 companies and 546 063 employed persons in relation to the previous year. The ratio was a total of seven companies closed among every ten companies which had been opened.

 

Companies with up to 4 employees concentrated 94.0% of the companies created and 61.9% of the respective number of employed persons, besides 96.7% of the extinct companies and 72.4% of the respective number of employed persons in 2004.

 

Trade accounted for the creation and extinction of the biggest number of companies: in 2004, 387 275 new companies were opened and 292 557 extinct, in comparison with the previous year. On the contrary, industry was the segment in which there was the lowest occurrence of companies opening and closing (64 591 and 49 688, respectively).

The highest opening rate occurred in Services (16.3%) and the highest closing rate, in Trade (11.6%). Industry had the lowest rates, both of opening (13.1%) and closing (10.1%). In Services, opening  rate in 2004 was 1.43 times higher than the closing rate; in Trade, this ratio was 1.32, and Industry 1.30. The net variation in the balance of companies has been always positive,  with a higher number of companies opened than closed.

 

In 2004, over 45% of the companies created in 1997 had been closed

                                                                                                                             

After seven years, 45.1% of the companies created in 1997 had been closed. The companies with the highest number of employed persons had the highest survival rates. The lowest survival rates were  obtained in the companies with a lower number of employed persons, in which are present the highest opening rates.  

 

One year after having been opened, 80.1% of the companies in the group with 0 -  4 employed persons were still active, whereas in the group which had 500 employed persons, the survival rate was 93.8%.

 

Seven years after having been opened, 46.1% of the companies with 0 – 4 employed persons did not continue existing. Among those with 500 or more employed persons, the percentage of closed companies was 19.9%.

 

Southeast Region hand over half of the persons employed by companies and other organizations

 

In 2004, Brazil had 5 370 427 companies and other organizations, which worked in 5 764 720 local unities and employed 37,4 million persons. Half of them were concentrated in the Southeast (52.3%) and in São Paulo (30.2%), followed by the South (18.9%), Northeast (16.6%), Central West (7.8%) and North (4.5%).

 

  

Southeast Region concentrates most of the employed persons in almost all the activities, except fishing

 

The Southeast Region had the highest rate of participation in economic activities, except fishing. It is also worth mentioning the contribution of São Paulo to most activities, except in fishing and mining and quarrying industry.

 

In terms of employed persons in economic activities in the other states of the Southeast Region, it is important to highlight mining and quarrying industry (48.4%). This occurred, mainly, due to the

extraction and exploration of petroleum in Rio de Janeiro and Espírito Santo, and also due to the extraction of ore in Minas Gerais.

 

Manufacturing industry had high concentration of employed persons in the Southeast and South Regions. Together, these regions accounted for about 79.5% of the total of industry, being the highlight São Paulo, with 35.1% of the total. The South Region contributed with 26.5% and the other states of the Southeast Region, with 17.6%. On the other hand, the highlight was the low participation of the North and Central west Regions (3.5% and 4.8%, respectively), with contributions below the regional averages (4.5% and 7.8%, respectively).

 

¹ In companies, salaried employed persons are more susceptible to conjuncture changes, whereas in public administration stability is guaranteed. Non-profit oraganizations have reduced participation in terms of employed persons and salaries.

 ² Average minimum wage: R$ 147,25 in 2000; R$ 172,75 in 2001; R$ 195,00 in 2002; R$ 230,00 in 2003; and R$ 253,33 in 2004.

³ The IPCA was used as inflator to the average salaries in the years 2000 to 2003, having year 2004 as reference. The accumulated change of the IPCA between December 2000 and December 2004 was 42.5%.

 ⁴ In the period the minimum wage changed from R$ 151,00 in December 2000 to R$ 260,00 in December 2004.

 ⁵ The INPC was used as inflator, having as reference year 2004. The accumulated change of the INPC between December 2000 and December 2004 was 47.1%.