47% of companies point to high input as the main difficulty, says FGV

The increase in raw material prices and the difficulty in expanding sales of goods and services are identified as the main difficulties faced by companies at the beginning of the year.

According to a special survey carried out by FGV Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas), 47% of the companies consulted indicated inflation of inputs as the main problem.

The issue affects all sectors: it is mentioned by around 40% of service and commercial companies, many of them in segments that work with food, and by 49% of construction and 56% of industry.

In addition to the inflationary issue, the difficulty to increase sales also weighs, cited by 28% of the companies, and the scarcity of inputs, by 17%. From January 3rd to 26th, 3,755 companies were consulted using an electronic form.

“These are the two factors that show the greatest difficulties: the inflation that has been showing up in all sectors, whether due to the increase in prices or scarcity of inputs, and also the economic slowdown at the turn of the year”, says Rodolpho Tobler, coordinator from the FGV Ibre trade and investment surveys.

He points out that 35% of service companies point to the slowdown in sales among the main difficulties, the highest percentage among the sectors. The percentages are even higher in the segments of food (39%) and information and communication technology (46%).

“Entrepreneurs have seen that the biggest difficulty at the beginning of the year is not only inflation, but also this economic slowdown.”

The institute also asked which expenses the company is having the most difficulty paying at the moment. Raw materials come first, cited by 41% of companies —​​65% in industry and 57% in construction.

Taxes are second among the most cited (36%), followed by employee salary (24%).

The research was carried out when the price of several raw materials was already high, but before the invasion of Ukraine by Russia, which boosted the prices of these products even more, with reflections on the prices practiced in Brazil that made it even more difficult to recover sales. .

Among these reflexes is the mega-adjustment of fuels promoted by Petrobras last week. In the January survey, 65% of road transport companies identified the issue of costs as one of the biggest challenges. In this segment, fuels are among the most relevant inputs.

“This issue of scarcity of inputs and prices, especially of commodities, this will all be aggravated. Depending on the duration of this war, it could get even worse”, says Viviane Seda Bittencourt, coordinator of consumer surveys at FGV Ibre.

Brazil’s official inflation index reached 10.54% in the 12-month period up to February. The IPCA remains far from the inflation target pursued by the Central Bank. The center of the benchmark measure this year is 3.50%. The ceiling is 5%.