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"The discontinuity of road freight transport between late May and early June increased finished product inventories and reduced input stocks, affecting costs, production, utilization of capacity and trust, "says Tabi Thuler Santos, coordinator of the FGV industry survey.
"While the June survey also brings the good news of improved expectations, this may be a pbading effect, influenced by the basic effect of the poor performance of the company. Industry in May, "he adds.
In June, confidence in the industry dropped in 12 of the 19 industry segments. The current situation index (ISA) fell 5.5 points to 95.1 points, its lowest level since September 2017 (90.8). The Expectations Index (IE), however, increased by 3.4 percentage points to 105.0 points, the highest level since May 2013 (105.4), thanks to a better perception of contracts and the production.
The significant deterioration in the level of inventories was decisive for the month's drop in confidence. The percentage of companies with excessive inventories rose from 7.9% to 12.8% between May and June – the worst since April 2017 (12.9%). The proportion of companies with insufficient stocks increased from 3.9% to 4.5%, returning to the same level as in April 2018.
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