Brazilian industry has its earliest origin in workshops dating from the beginning of the 19th century. Most of the country's industrial establishments appeared in the Brazilian southeast (mainly in the provinces of Rio de Janeiro, Minas Gerais and, later, São Paulo), and, according to the Commerce, Agriculture, Factories and Navigation Joint, 77 establishments registered between 1808 and 1840 were classified as "factories" or "manufacturers". However, most, about 56 establishments, would be considered workshops by today's standards, directed toward the production of soap and tallow candles, snuff, spinning and weaving, foods, melting of iron and metals, wool and silk, amongst others. They used both slaves and free laborers.Szmrecsány, p. 282
There were twenty establishments that could be considered in fact manufacturers, and of this total, thirteen were created between the years 1831 and 1840. All were, however, of small size and resembled large workshops more than proper factories. Still, the manufactured goods were quite diverse: hats, combs, farriery and sawmills, spinning and weaving, soap and candles, glasses, carpets, oil, etc. Probably because of the instability of the regency period, only nine of these establishments were still functioning in 1841, but these nine were large and could be considered to "presage a new era for manufactures".Szmrecsány, p. 283
The advent of manufacturing before the 1840s was extremely limited, due to the self-sufficiency of the rural regions, where farms producing coffee and sugar cane also produced their own food, clothes, equipment, etc., the lack of capital, and high costs of production that made it impossible for Brazilian manufacturers to compete with foreign products. Costs were high because most raw materials were imported, even though some of the plants already used machines.Szmrecsány, p. 285-7
From a colony whose aim was to export primary goods (sugar, gold and cotton), Brazil has managed to create a diversified industrial base in the 20th century. The steel industry is a prime example of that, with Brazil being the 9th largest producer of steel in 2018, and the 5th largest steel net exporter in 2018. Gerdau is the largest producer of long steel in the Americas, owning 337 industrial and commercial units and more than 45,000 employees across 14 countries. Brazil is also a key player in the aircraft market: Embraer is the third largest producer of civil aircraft right after Boeing and Airbus.
1840s–1860s
The promulgation of the Alves Branco Tariff modified this picture. This tariff succeeded in increasing state revenues and stimulating the growth of national industry.Szmrecsány, p. 294Sodré, p.198-200 The sudden proliferation of capital was directed to investments in urban services, transports, commerce, banks, industries, etc.Szmrecsány, p. 290 Most of the capital invested in industry was directed toward textiles.Vainfas, p. 373 With unprecedented industrial growth, multiple manufacturing establishments appeared, dedicated to such diverse products as smelting of iron and metal, machinery, soap and candles, glasses, beer, vinegar, gallons of gold and silver, shoes, hats and cotton fabric.Szmrecsány, p. 291
One of the main establishments created at this period was the metallurgical factory Ponta da Areia (in English: Sand Tip), in the city of Niterói, that also constructed steamships.Vainfas, p. 374 It is likely that the textile industry benefited most by the virtue of being the oldest in the country. It first appeared in 1826, in the city of Recife, capital of the province of Pernambuco. The textile sector was quite dynamic in the monarchic period and received large investments until 1890, when it entered into decline. Various modernizations occurred, principally between 1840 and 1860, when factories with a high level of technological capability were created, able to compete with other major international centers. Other improvements came with the establishment of factories and forges geared for the production of equipment and pieces for textile manufacture.Szmrecsány, p. 318-9 And now Brazil ranks second in the world's largest producer of denim, the third – for the production of knitted fabrics, the fifth – for the manufacture of clothing and seventh – for the production of yarns and fibers. The concentration of industry that emerged in the province of Bahia considerably expanded its economic scope, reaching the south of Ceará, Piauí and even Minas Gerais.Szmrecsány, p. 308
The extinction of the traffic in African slaves in 1850, contrary to what many authors allege, did not "liberate" credit for industrial development. That claim has no documentary basis whatever.Vainfas, p. 375 On the contrary, capital employed in the trade had already been directed to sectors such as enterprises of urban services, transport, banking and trade. But it is possible that there was an indirect contribution to the growth of the industrial sector through banking loans.Szmrecsány, p. 300 In 1850, there were 50 factories with a capital of at least Rs 7.000:000$000.Vianna, p. 496
The imperial government created several incentives for the industrialization of the country. The earliest of these date from the reign of Dom Pedro I, through awards of government grants. The first establishment to receive such a grant was the Fábrica das Chitas (in English: Chitas Factory), devoted to paper and printing, by a decree of 26 June 1826.Szmrecsány, p. 298 The practice was resumed in the 1840s, when new industrial establishments received subsidies. in 1857, seven factories benefited from this practice of incentives, among them, the Ponta da Areia mentioned above and that was owned by Irineu Evangelista de Sousa (later Viscount of Mauá). One of the criteria for the granting of these subsidies was the exclusive employment of free workers.Szmrecsány, p. 298-300
The goal, then, was not only the transition from the old colonial economic system to that of the modern capitalist, but also from slave labor to free. Other incentives arose, such as the decree of 8 August 1846 that exempted manufactured products from certain transport taxes (internally as well as externally), shielded from military recruitment a specific number of employees of industrial establishments and eliminated tariffs on parts and machinery imported for textile factories. The following year in June, a new decree stated that all industrial establishments on national soil would be free of taxes on imported raw materials.Szmrecsány, p. 295–296 Thus, production costs of domestic industry dropped considerably, allowing it to compete with foreign products. The Alves Branco tariff underwent modification in 1857, reducing to 15% the tax on imported products.Szmrecsány, p. 296Sodré, p. 200 Later, under the Rio Branco cabinet at the beginning of the 1870s, the tariff on foreign products was newly raised to 40%, and new raw materials were exempted from import taxes.
1860s–1880s
At the end of the 1860s, came a new industrial surge caused by two armed conflicts: the American Civil War and the Paraguayan War. U.S. production of cotton was interrupted by the blockade by Union forces of the Confederacy. The second resulted in the emission of currency and an increase in import tariffs to cover the costs of war. This resulted in a great stimulus not only for the textile industry, but also for other sectors, such as chemicals, cigars, glass, paper, leather, and optical and nautical instruments.
During the 1870s, the decline of the coffee region of the Paraíba Valley and in some areas of sugar production, caused many plantation owners to invest not only in the cotton textile industry, but also in other manufacturing sectors. Deployment of a railway network throughout the national territory also stimulated the emergence of new industrial activities, mainly in São Paulo.Szmrecsány, p. 185 Industry experienced a major impetus in this period. From the 1870s onward, the great expansion of industrialization became a constant in Brazil.Vainfas, p. 373, 375 In 1866, there were nine textile factories with 795 workers.Graça Filho, p. 80 In 1881, there were 46 textile factories through the country: 12 in Bahia; 11 in Rio de Janeiro; nine in São Paulo; nine in Minas Gerais; and five in other provinces.Graça Filho, p. 84 The number of establishments diminished a little by 1885 to 42 textile factories with 3,172 workers. However, the drop did not impede overall growth in the sector up to 1889.
In 1880 the Industrial Association was established, with its first board elected the following year. It supported new industrial incentives and propagandized against the defenders of an essentially agricultural Brazil.Vainfas, p. 376 9.6% of the capital of the Brazilian economy was directed to industry by 1884, and by 1885, 11.2%. This figure dropped sharply during the republican period, falling to 5% between 1895 and 1899, and improved slightly to 6% between 1900 and 1904. Still, it took many years to return to the level that prevailed during the Empire.Silva, p.61 At the time of its downfall in 1889, monarchical Brazil had 636 factories (representing an annual rate of increase of 6.74% from 1850) with a capital of Rs 401.630:600$000 (annual growth rate of 10.94% since 1850). Of this amount, 60% were employed in the textile sector, 15% in food, 10% in the chemical, 4% in timber, 3.5% in clothing and 3% in metallurgy.Silva, p. 60
Brazilian industrial sector
Overview In Brazil, most large industries are concentrated in the south and southeast regions of Brazil. Historically, the northeast has been the poorest part of the country, but it is now starting to attract new investments.
Brazil has the third best advanced industrial sector in The Americas. Accounting for one-third of GDP, Brazil's diverse industries range from automobiles, steel and petrochemicals to computers, aircraft, and consumer durables. With the increased economic stability provided by the Plano Real, Brazilian and multinational businesses have invested heavily in new equipment and technology, a large proportion of which has been purchased from U.S. firms.
In 2019, Brazil's secondary (industrial) sector accounted for only 11% of the country's economic activity. In the 1990s, this sector represented more than 15% of the GDP. By 1970, its participation was at 21.4%. The Brazilian industry has experienced one of the most significant declines globally over the past 50 years. The deindustrialization of the Brazilian economy is particularly notable and occurred early on. It is common for the industry to lose ground as families' per capita income increases, leading to a shift towards consuming more services and fewer goods. However, in Brazil, a high per capita income was not achieved, and the country did not become wealthy enough for the productive structure to transition rapidly. As a result, the country is at a standstill. The sector's stagnation partly accounts for the slow recovery of the labor market in the country. Experts suggest that the solution to this issue would involve implementing more financing mechanisms, addressing bottlenecks in national infrastructure and the tax system to revitalize the industry and enhance Brazil's competitiveness. Brazil ranks as the ninth-largest industrial park in the world.Mola de emprego e do PIB, indústria brasileira não reage e emperra avanço da economia Geographical variation In 2017, the Southeast was responsible for 58% of the value of industrial transformation in Brazil, followed by the South (19.6%), Northeast (9.9%), North (6.9%) and Midwest (5.6%).Indústria perde 1,3 milhão de empregos em quatro anos Automotive sector