Fynsa
The National Accounts figures for the second quarter showed interesting data. In the aggregate, there was an upward correction of the growth preliminarily indicated by the Imacec (3.1% vs. 2.9%), which has had some impact on agents' expectations, particularly for the end of the year. This was accompanied by a revision of the first quarter figures from 2.3% to 2.5%. However, we believe that the biggest surprises were found in the domestic demand data, especially in consumption, but above all in investment. The question then arises: has the recovery begun?
First, a little explanation. Investment grew 16.2%, with the accumulation of inventories being the main impact, particularly that of manufactured products, which reached an accumulated ratio in twelve months of 0.1% of GDP. Gross fixed capital formation (i.e., investment minus inventory accumulation) increased 5.6%, mainly due to the machinery and equipment component (11.4%), especially transportation equipment and machinery for industrial use. The construction and other works component, on the other hand, grew 2.0%, due to higher investment in engineering works, an effect that was partially offset by lower construction.
The growth of one of the weakest GDP components in recent times gave rise to multiple interpretations and analyses, several of them arguing that the improvement was due to better expectations or thanks to the signs of a change of administration. Although this thesis cannot be dismissed, I believe that caution must be exercised when evaluating data at the margin, especially when the arguments that may be behind it are multifactorial. First, while the variation may come as a surprise, the sectors focused on are not: mining and energy. In general, these sectors move independently of the political cycle, at least when the alternation is between reasonable sectors. Secondly, we cannot yet speak of a trend, so growth of this order of magnitude is sometimes due to a couple of large projects or their accounting rather than a change of trend in the sector. Finally, when we look at other quantitative or qualitative indicators, they do not necessarily move in the same direction. For example, the recently published Business Perceptions Report (BPR) tells a completely different story, as can be concluded when looking at the dynamics of credit or debt placements by companies, all indicators that remain weak, some even worsening at the margin.
Therefore, although we would love for this to mark the beginning of a sustainable economic recovery, it seems to us that concluding this from just one figure is somewhat hasty. The elements that have had a negative impact on investment are not cyclical and depend on regulatory and political factors, legal certainty, working together with the public sector, etc. As long as we do not have that, regardless of the political sector in power, businessmen will continue to be cautious before starting new projects or expanding current ones. We will have to wait.
