Itaú BBA - Capital Goods: No Signs of Recovery

Sector Insights

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Capital Goods: No Signs of Recovery

junio 19, 2015

Economic contraction affects capital goods sector

• Domestic demand for capital goods has been declining sharply in 2015 as entrepreneurs show less willingness to invest.

• Currency depreciation tends to decrease the absorption of these goods, as imports become more expensive. On the other hand, currency depreciation may boost exports, which remain at low levels.

• Lower demand for capital goods has been prompting sharp production declines. Leading indicators and economic fundamentals suggest that this trend will continue in the next few months. 

• Falling production has dragged down employment and led to decelerating wage gains in this sector.


 

Please open the attached pdf to read the full report.



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