The impact of macroeconomic variables in the brazilian industry productivity

This work adopted ARDL methodology to identify short and long run relationships between those macroeconomic variables and productivity. Data was collected form IPEADATA, IBGE, CNI and BACEN quarterly basis from 2011Q1 to 2023Q4. The following time series were selected: Industrial Productivity (measures labor productivity in the industry sector), IBCBR (proxy of GNP measures economic growth), ICI (Industrial Cost Indicator), CDI (interest rate), AER (Monthly Average Exchange Rate (R$/US$)), and IPP (Producer Price Index). Main results show that IBCBR and AER impacts positively productivity and on the other hand, CDI, ICI and IPP impacts productivity negatively. Industry productivity is a very relevant issue in any economy and especially in Brazilian one. Main results show that the macroeconomic environment affects directly and indirectly the level of productivity in the Brazilian industry. A continuing growing economy, low level of interest rates, depreciated real exchange rate and inflation rates under control, are essential for performing a healthy economic environment to the productivity of the industry.