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Abimaq expects 7% decline in machine turnover in 2024 and the impact of rain in RS

Revenues from the machinery and equipment industry are expected to fall 7% in 2024, after numbers earlier in the year fell short of expectations, industry association Abimaq said on Wednesday, adding that the estimate may be revised due to rain impacts in Rio Grande do Sul, the second largest market for machinery and equipment.

According to the body, the State of Rio Grande do Sul represents approximately 20% of the total production of the sector, second only to Sao Paulo, and over half (52%) of its turnover comes from agricultural machinery, which in 2023 represented the 24% of the entire national machinery and equipment industry.

Abimaq had already announced at the end of April that it wanted to revise its numbers downwards for the year, after closing the first quarter with a 21.3% drop in revenues. Previously, the entity forecast revenue growth of 3.5% in 2024.

Looking only at operations in Brazil, the new projection is that the sector’s net revenues will decline 8.3% this year, compared to the previous magnitude estimate of 5.5%.

In the agricultural machinery segment, a decline of 15% is expected, but this figure could rise up to 18%, considering the effects of heavy rains in Rio Grande do Sul, said Pedro Estevão, president of the Chamber of Agricultural Machinery and Equipment Sector Abimaq.

“We imagined a (negative effect from the tragedy in RS) of 5% on sales… now there is also the impact of reconstruction. We don’t know exactly how quickly people will rebuild Rio Grande do Sul, so maybe it’s not 5%, it’s a little lower,” Estevão told reporters.

He stressed that an exact figure has not yet been calculated and that much of this estimate still depends on the federal government’s measures for the state, which can mitigate negative impacts.

“It’s still in the preliminary stage, I would need to see the Safra Plan, what it looks like, if there will be other government measures specific to Rio Grande do Sul.”

Abimaq’s executive director of economics and statistics, Cristina Zanella, said the low forecast for the sector’s net revenues in 2024 was due to weaker-than-expected start-of-year data.

“These numbers may still be revised when we start receiving information about what is really happening to companies in Rio Grande do Sul,” Zanella said.

“We have an idea of ​​what’s going on, but the official numbers will start coming in around June or July, which is the May and June data,” he said, adding that thereafter the numbers could be “maybe a a little worse” than those published this Wednesday.

APRIL NUMBERS

According to data released this Wednesday by Abimaq, the machinery and equipment sector recorded a 20.1% decline in total net revenues in April compared to the same period last year, to 18.47 billion reais.

Apparent consumption of machinery and equipment in April fell 13.4% from a year earlier, while the sector’s installed capacity occupancy level rose to 74.9%, the third consecutive increase, but still at below the level observed in the same period. of the previous year.

The sector’s exports increased in April by 22.7% in the annual comparison, amounting to 1.2 billion dollars, helping to reduce the decline accumulated during the year. Imports totaled $2.4 billion, an increase of 18.8% on a like-for-like basis, with a focus on the acquisition of machinery intended for the manufacture of non-durable and semi-durable consumer products.

In April, the order backlog of the Brazilian machinery and equipment industry amounted to 9.6 weeks, a decrease of 12% compared to the same period last year.

Source: Terra

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