Brazilian electronics sector grows 8% in 2011, short of forecast

The Brazilian electronics industry will close this year with revenue of U.S. $73.7 billion (R$134 billion), an increase of 8% from 2010 but short of an initial expectation of 13%, an industry group said this week.

The findings by Abinee, a nonprofit group representing Brazil’s electrical and electronic industrial sector, were presented Dec. 8 by the group’s president, Humberto Barbato.

Another negative point is related to trade balance. According to Abinee, the electronics sector will close this year with a trade deficit of more than U.S. $32 billion, an increase of 18% compared with last year. The deficit stems from an increase of imports, which are expected to reach $40 billion, while exports may not reach $8 billion.

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However, because the current revenue figures reflect companies’ activities over the past few years, the results do not completely depict the electronics sector’s current situation, Barbato said. “Consider how much of the internal market is being serviced by local produce or import,” he said.

Due to the appreciation of the real, imports of final goods accounted for 22% of industry revenue, underscoring the difficulty that local firms face in competing. The situation has reached a state in which only a move in the exchange rate may be enough to reverse the loss of competitiveness, said Barbato, who defended the creation of an incentive program to encourage the purchase of products made by companies operating in Brazil.

Abinee said Brazil’s hosting of the World Cup and the 2016 Summer Olympics should serve as a lever for opportunities for companies operating in the country.