From 2007 to 2008, the number of industrial companies increased 10.8%...

With the objective of identifying the industrial segment’s basic structural characteristics, PIA – Enterprise 2008 has measured, for the first time, data relative to establishments which employ between one and four persons. Accounting for approximately half of the industrial companies (47%), such establishments hold about 6% of the total number of employed persons and are responsible for about 1% of manufacturing costs (VTI), that is, of the difference between gross production value and operating costs. The approximately 165 thousand companies which have five or more persons employed have sales revenue of R$ 1.7 trillion, which represents 99.1 % of the total.  Expenditure on personnel was about R$ 131 billion, or 98.4%. Direct production costs exceeded R$ 131 billion ands gross investments for fixed assets¹ reached around R$ 138 billion. Another new element in this year’s edition of PIA is the changes effected in the National Classification of Economic Activities (CNAE). The implementation of CNAE 2.0 means a new way to present the Brazilian business structure, differently from the previous version.

From 2007 to 2008, the number of industrial companies decreased 10.8%

The number of industrial companies in Brazil increased 10.8% when figures in 2007 and 2008 are compared, according to the Annual Survey of Industry (PIA) – Enterprise 2008, having changed from 279,820 to 310,017. The segment, which employs about 7.9 million persons, had revenue of R$ 1.8 trillion, considering that manufacturing cost was R$ 722 billion. Expenditure on personnel exceeded R$ 225 billion versus the almost R$ 195 billion recorded in the previous year. The survey also showed that the average size of companies has decreased, changing from 27 employed persons in 2007 to 25 in 2008. A possible explanation is that the increase of the number of companies was bigger than that of employed persons, the latter about 5.5%. In nominal terms, there was increase of the net sales revenue (17.4%), of manufacturing cost (20.2%) and of expenditure on personnel (16.1%).

Sales of products and services represent 84.2% of revenue

Sales of products and services remained, in 2008, as the main source of revenue for industrial companies with or more employed persons, encompassing more than 84% of the total, despite the loss of 1.8 percentage points when compared to 2007. On the other hand, the revenue obtained from resale of goods and rendering of non-industrial services increased in participation by 0.7 percentage points, and the revenue from non-productive activities increased by 1.1 percentage points.

Consumption of raw material remains as the main component of costs and expenditure, reaching 43.6% in 2008, but with decrease in terms of participation, since it represented 47% in 2007. The acquisition of goods for resale reached the level of R$ 93 billion in 2008, representing increase of 0.8 percentage points.

Direct production costs had participation of 7.2%, less than in 2007, when this variable was 7.6%. This can be explained by the loss of participation of the group payment of services rendered by others and mixed consumption for maintenance and repair of machinery and equipment, which changed from 4.9% in 2007 to 4.5% in 2008. Other costs and expenses represented 32.1%, more than the 28.2% recorded in 2007.

Coke, petroleum derivatives and biofuels are relevant to manufacturing costs

The five most relevant subsectors in manufacturing costs in in the ranking of national industry 2008 are the same as in 2007. Representing more than 50% of the total, the highlights in 2008 were: production of coke, of products obtained from petroleum and biofuels (16.5%); of food products (12.3%); of automotive vehicles, of tow cars and vehicle bodies (10.0%); metallurgy (8.1%); and production of chemical products (7.3%). In the remaining activities, the highlight was mining and quarrying industry, which represented 4.1% of manufacturing costs in 2007 and 5.1% in 2008.

With reference to the number of companies, the five main subsectors accounted, both in 2007 and in 2008, for approximately 53% of the total. They are: production of clothing and accessories; of food products; of metal products, except machinery and equipment; of non-metallic minerals; of rubber and plastic and of plastic material.

Manufacturing costs of companies with more than 5 employees increases 20.3%

The numerical increase of companies with five or more persons employed was 5.7% in relation to 2007, but, in terms of persons employed, increase was 4.9%. Manufacturing costs rose 20.3% when compared to figures in the previous year, which is partly due to the sector of manufacturing o coke, products obtained from petroleum and biofuels, which contributed with 4 percentage points to this increase. Other highlights were food and car industries, both with 2.6 percentage points, and mining and quarrying and metallurgy industries, with 1.7 percentage points. Together, these subsectors represented about 13 percentage points.

In nominal terms, net sales revenue increased 17.3%; expenditure on personnel, 16.1%; direct production costs, 17.5%, and gross investments for fixed assets, 18.1%.

Southeast and South Regions hold 80.5% of the manufacturing cost

Concentration of the biggest participation in the total manufacturing cost (VTI) and in net sales revenue occurs in the Southeast (62.2% and 59.5%) and e South (18.3% and 20.7%), with percentages significantly above those of the Northeast (9.7% and 9.1%), North (6.2% and 5.6%); and Central West Region (3.7% and 5.2%). The Southeast is also ahead in terms of the variable number of industrial plants (local units of a same industrial company) and employed persons, with 52.6% and 54.0%, respectively, followed by the South (27.4% and 25.0%).

It is worth mentioning that, in the Northeast (11.2% and 12.6%) and Central West (5.7% and 4.8%)  these variables have bigger relative participation than VTI, net revenue of sales and expenditure on personnel. The North Region (3.1% and 3.6%) is relatively more important in terms of VTI, net revenue of Sales and expenditure on personnel, mainly due to a bigger presence of intensive sectors of technology (Industrial Free Zone) and metallic commodities (see Chart 4, on the following page, which shows, by state, the three main activities contribution to VTI).

From the perspective of participation in VTI, mining and quarrying industries feature among the five major industrial activities in almost all the Regions, except in the South, where food industry and car industry appear as the leaders. In general terms, it is also possible to observe that production of coke, of products obtained from petroleum and of biofuels has become more relevant in the regions, especially in the Northeast (19.4%), Southeast (12.1%), North (10.2%) and South (9.3%), although it presents little participation in the number of employed persons and in the number of industrial plants of national industry.  

One of the segments with the biggest levels of participation, in terms of manufacturing costs and employed persons, in most Regions, is food industry. It is worth mentioning that, in the Central West, reflecting the dynamism of this activity in the area, food products concentrated 45.9% of manufacturing costs, 22.5% of the number of local units and 41.2% of persons employed. In the North Region, the industry of beverages appears in 2008 as one of the main segments with reference to industrial manufacturing, which reflects, mainly, its disaggregation in relation to food industry in the new National Classification of Economic Activities (CNAE).

Understanding the changes in CNAE 2.0

Since 2008, which presents results which date back to 2007, IBGE now releases a new data series of the Annual Survey of Industry– Enterprise, using the 2.0 version of the National Classification of Economic Activities (CNAE), what represents a new way to present the Brazilian industrial structure. In relation to PIA – Enterprise, the main changes observed with the adoption of CNAE 2.0 were, among others:

·         In mining and quarrying industries, support services activities have become a specific section

·         In manufacturing industry, there are industrial activities represented at more detailed levels: manufacture of beverages (now separated from food industry); manufacture of pharmaceutical products and preparations (which now includes manufacture of radioactive structure for diagnosis); computer, electronic and optical products; furniture (which now includes manufacture of any material for any kind of use, as well as the manufacture of consoles for sewing machines, television sets and others) and activities of maintenance, repair and installation of machinery and equipment; and

·         Partial or complete change of activities of editing, printing and reproduction of recordings and of the recycling section to other sections of CNAE 2.0, so that companies whose activities are mainly based on editing and editing and printing are no longer investigated.

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¹ Fixed assets are the tangible goods of a company, such as furniture and equipment. Gross investments in fixed assets refer to how much has been invested by companies, up to a certain moment, in material goods.