Weekly Report - 12 July 2005

BRAZIL | Industry fearful of second-half upset. Industrial production in May was 1.3% higher than in April, taking the five-month total up to a level 4.7% higher than that of the same period of 2004. However, the national confederation of industrialists, CNI, has sent out a warning of disturbing trends. Sales in the first five months, it said, were running 2.2% lower than in the comparable period of last year, creating 'an unusual situation, which had not occurred in 18 months'. The CNI suggests that for the time being industries have been accumulating 'unwanted stocks', but that this may not last. There has also been a contraction in the utilisation of installed capacity, partly attributed to the 'maturing of investments made in 2003 and 2004'.