The consumer electronics industry ended 2021 with the first negative result in four years. The factories sold 94.1 million devices to retail, a volume 7.2% lower than the previous year, according to Eletros, the association that brings together manufacturers in the segment.
The biggest drop occurred in televisions, 15.8%, followed by small appliances (7%) and white goods, such as stoves, refrigerators and washing machines, with a retraction of 4.9%. The only line whose sales grew last year was air conditioners, which advanced 7.2%, totaling 4.45 million units.
Even so, there was a brake on the upswing. By 2020, product sales had increased by 30% over the previous year.
“It was a frustration. Not even in the first year of the pandemic we had such bad numbers”, says the president of Eletros, José Jorge do Nascimento Júnior. In 2019 and 2020, the sector grew by 5% each year.
And the expectation was to advance another 5% in 2021 or, in an optimistic perspective, up to 10%.
This prognosis even seemed viable on account of the performance of the first half, which recorded double-digit growth over the previous year. But the market turned in the second half.
Between July and September, sales fell 16% compared to the same period in 2020. And a drop of 28% came in the last quarter, a period that includes Black Friday and Christmas, the best sales dates for electronics.
no purchasing power
The drop in sales has to do with the rise in inflation, which erodes the purchasing power of consumers, and the consequent rise in interest rates. As a good part of electronics sales is financed, this was another obstacle to term consumption.
Other than that, with the advancement of vaccination and the reopening of services, there was a dispute for the consumer’s pocket by other sectors, such as tourism, according to the president of Eletros.
The strong pressure from production costs – with a sharp rise in steel prices, an increase in electricity tariffs and the exchange rate issue – also made electronics more expensive. This inhibited sales.
At the beginning of the year, the market remains weak. “Retail is well stocked, and we are in a very complicated situation to sell our products”, says Nascimento Júnior.
According to him, there were industries in the audio and video line that gave ten days of collective vacation in January to reduce production.
This sales frustration appears in accumulated inventories. According to the Transformation Industry Survey of Fundação Getúlio Vargas (FGV), the balance of companies in the sector that declared having excessive inventories in January this year was 36.6%.
It is the highest brand since December 2019 (37.7%) and also higher than the December 2021 figure of 31.4%.
When a sector has a greater number of companies with high inventories, the next step is to reduce or stabilize production, explains Cláudia Perdigão, a researcher at FGV and responsible for the study.
From December to January, the level of utilization of the installed capacity of electronics and computer items factories, for example, fell by more than four percentage points: from 74.4% to 70%, according to the survey. “This means that the sector has slowed down in production”, says the economist.
Layoffs in the Free Trade Zone Worry
The decline in the electronics market is reflected in the Industrial Pole of Manaus, which concentrates industries in this segment. A survey by the Amazonas Metalworkers Union shows that companies in the pole dismissed 7,500 workers between December 2021 and the first half of January, a number considered by the entity to be above normal.
Of those laid off in the period, which represent almost 10% of the total number of employees at the center, 6 thousand were permanent and 1,500 were temporary.
About 70% of the cuts occurred, according to the president of the union, Valdemir Santana, in industries in the electronics sector.
“Usually, when a temporary contract ends, 40% of the workers are hired, but this year there were no temporary workers.”
Philco alone fired 800 workers in the period, according to the union. The company confirmed the cuts and informed, through a note, that every year it hires workers to meet the seasonality of retail and, in recent years, it has managed to absorb the teams after the seasonal period.
“In 2021, however, the hiring for the specific production of air conditioners was higher, and this was reflected in the need for shutdowns after the completion of additional production”, says the note.
Multilaser, in a note, informs that it dismissed 81 workers for performance in the factories of Extrema (MG), Manaus (AM) and at the headquarters in São Paulo. According to the company, “it is considered a minimum turnover for a company with more than 4 thousand employees”.
The company has 171 vacancies in Extrema, Manaus and São Paulo to replace departures and reinforce staff, he adds in a note.
José Jorge do Nascimento Júnior, president of Eletros, which brings together manufacturers in the segment, says he is not aware of layoffs above normal in the sector.
He argues that companies are holding on to labor as much as possible in the expectation that the market and business environment will improve in the second quarter. The expectation is that Mother’s Day and the World Cup will boost sales.
However, if the situation does not improve, he admits that “inevitably” there will be layoffs, retractions in investments and reassessment of production schedules.
“It’s a horrible scenario, but it’s not what we envision.”
The information is from the newspaper. The State of São Paulo.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
