Cost-Competitiveness Indicators

The publication Cost-Competitiveness Indicators allows one to track the evolution of Brazilian industry’s competitiveness in relation to the country’s main trading partners, based on the unit labor costs (ULC), an indicator of cost-competitiveness. The annual publication presents the relative unit labor costs (Relative ULC), which compare the evolution of ULC between two countries, that is, Brazil and each of its main trading partners. It also presents a more general measure called the effective unit labor costs (Effective ULC), which is the weighted average of the relative ULC between Brazil and its main trading partners, with the weights given by the share of each partner in the country’s trade flows.

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Brazil loses competitiveness in terms of cost comparison

In 2017, Brazilian industry lost competitiveness compared to the country’s main trading partners. The labor cost in US dollars required to produce one unit of output in Brazil rose more than the average cost in the country’s main trading partners. According to effective ULC, producing one unit of output in Brazil is currently 5.4% more expensive on average than in its trading partners.

August/2018

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August/2018

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