Construction Equipment Internal Sales in Brazil from January thru May grew 35% over the same period of 2019. The Brazilian Machinery Builders´ Association (ABIMAQ) expects 2020 sales to hit 20,000 machines, 15% more than in 2019.
Source: Valor Econônico Read The Article
PSR Analysis: The Construction segment was the less affected by the pandemic than some other segments. The interest reduction directed investment to real state, especially housing, and some measures, such as the new regulation for sanitation, recently approved by the parliament, will boost the Construction business in 2020 and more significantly in the coming years. PSR
Brazil AG Equipment Sales Drop in H1 2020 but Growth Seen in 2020
Source: G1 Read The Article
From January to June 2020, the total sales reported by the National Association of Motor Vehicle Manufacturers (ANFAVEA) dropped 1.3% compared with same period in 2019, with 196,000 units. Tractors sales dropped 5% while Combines dropped 9% and Sugar Cane Harvesters grew 24%. The reviewed expectation of ANFAVEA is 3% growth in 2020 over 2019.
PSR Analysis: First, it is necessary to consider that ANFAVEA covers only a small part of the equipment and OEMs. Second, sales of tractors should be boosted by the new “Safra Plan” with reduced interest rates combined with the good momentum of the agricultural business in Brazil.
A shortage of parts and a shutdown of plants reduced the offer during the pandemic period, but it will be recovered through the year. The impact on production will be more significative due to the loss of exports, since other South America countries are suffering more than Brazil in Ag Business. PSR
New Sanitation Regulation Will Boost CE Sales and Production into 2035
A new legal framework for sanitation was approved by Parliament and sanctioned by the President in July. The new regulation will allow higher participation by the private sector in water supply and sewage collection and treatment services. It also set targets to reduce the population percentage without access to water supply and sewage collection from 30 million and 100 million people to zero and 20 million, respectively.
Source: Revista Grandes Construções Read The Article
PSR Analysis: With the current investment level, it would be reached in 2060. The level of investment will increase by US$ 5 Billion per year and a significant amount of this investment will be directed to Construction Equipment in the coming years. PSR
Fabio Ferraresi is Director Business Development South America for Power Systems Research
