Brazil's economy cut 654,946 formal jobs in December, the worst loss since May 1999 and more than double the 319,414 jobs cut in December 2007... The figure was higher than the 600,000 job losses predicted by President Luiz Inacio Lula da Silva last week and more than double the 300,000 considered normal for the month of December because of seasonal factors.
The bulk of the job cuts came in industry, services, agriculture and the construction sectors, with the latter two especially hard-hit.
Just a smattering of companies from a variety of industries which are banking on Brazil for future growth:
We believe that there are significant growth opportunities in emerging markets. To facilitate our growth plans, we have been increasing our investments in a number of new markets this year, including opening offices in Brazil, Russia, China and the Czech Republic.
On its Fall 2008 Analyst Event call in November, Hasbro said it would ramp up investment in BRIC countries even more:
In 2007 our revenues were less than $120 million in aggregate in the emerging markets of Eastern Europe, Asia, and South America. We believer our major competitor did somewhere between $4 and $500 million in South America alone. We have fallen behind. From 2001 to 2005 we had other priorities. We had to fix our balance sheet and get our core business growing. Now we have achieved that, we can invest in spend and are doing so in China, Brazil, Russia, and the Czech Republic. We intend to play catch up very quickly.
What growth there was in the global market was in emerging markets where Q3 volume was 4.04 million vehicles, up 4.7% compared with a year ago. Moderating commodity prices and tighter credit in Russia and Brazil are tempering their record producing growth. But GM's Russia sales of 76,000 vehicles were up 0.5%, while Brazil sales of 158,000 increased 15.5%.
In Brazil we see very significant growth potential, in a country with a close 200.0 million people and around 25.0 million cars. Our services are gaining increased traction around the country now that we provide nationalized coverage. We have strong relationships in place with a number of insurance companies and we are beginning to see the reward of the efforts… We see Brazil as Ituran’s growth engine, we do expect continued growth… The geographic breakdown of the revenues in the quarter was as follows: Israel, 55%; Brazil, 34%; USA, 2%; and Argentina, 9%.
As to growth CapEx we have halted those projects where it is economically practicable to do so. The largest ongoing projects reside in Brazil and pertain to the offsite mine in Juruti, the refinery expansion of Sao Luis and the hydro projects. We individually reviewed each project and evaluated the option of halting construction. The cost benefit analysis determined that stopping the projects would be value destructive for the company. We therefore charged the team with completing the projects as soon as possible and as cash efficiently as possible.
For the U.S. we project that the downturn continues but you always have to bear in mind the U.S. got into this already earlier and this is the third year where we would see a negative growth rate here. Same picture for the EU and then there are places like the BRIC countries and Russia we talked about in India but Brazil, for instance, was 0.8% growth rate. Still holding up nicely.
South America is comprised of seven markets, and as a whole this region's sales growth slowed, primarily reflecting a slowdown in Venezuela and Argentina, offset by accelerated growth in Brazil.
In Brazil we are pleased to deliver on our expectation of positive local currency sales growth that increased 28% year-over-year for the quarter. Including the benefit from currency, Brazil reported third quarter net sales growth of 47%. Brazil is a good example of a successful market shift from a recruiting-base model to a consumption-base model.