Letter IEDI n. 1130—Industrial employment and income in 2021
The recent evolution of employment in the country is still influenced by the COVID-19 pandemic, either because economic activities have not yet been fully normalized, despite the advancement of vaccination, or due to the very low comparison bases, when year-on-year performance is studied. In spite of this, there are indications of recovery, even if still partial and with many weaknesses, as the IEDI has been highlighting in its analyzes.
In this Letter IEDI, employment in the private sector is examined according to the microdata of the IBGE's continuous PNAD, identifying the different trajectories across sectors—with emphasis on industrial employment— and types of occupation. The latest available data refer to Q3'21.
The total number of people employed in the private sector grew +13.6% in relation to Q3'20, and the best performing sector was construction, whose occupation advanced +20.2%. Other sectors also showed significant results, such as services (+14.2%) and retail trade (+13.4%).
In the manufacturing industry, the +12.9% increase was below the general average, but in absolute numbers it contributed to the growth of total occupation as much as construction, the sector that grew the most. Its job creation, which amounted to 1.2 million added people, accounted for 13% of the total improvement in private sector employment from Q3'20 to Q3'21.
With the recent reaction, manufacturing employment also surpassed pre-pandemic levels. Compared to Q3'19, it registered an increase of +1%. Meanwhile, the number of employed people in the private sector as a whole is still in the red in comparison to 2019: -1.7%. Excluding manufacturing, the result reaches -2.2%.
Industrial employment has shown to be more dynamic than the overall private sector aggregate in both the formal and informal segments. In occupations with a signed contract, the manufacturing industry's growth in relation to Q3'20 was of +8.9%, versus +8.6% for the private sector as a whole. In the segment without a formal contract, the increase was of +26% against 23.1%, respectively.
Among the 23 different industrial branches analyzed, only 3 had a negative figure for total occupancy compared to the same period of the previous year: computer equipment, electronic and optical products (-19.2%), pharmacochemical and pharmaceutical products (-17.6%) and food products (-1.2%). All of these include activities less affected by the initial shock of the pandemic, due to teleworking, social distancing and the sanitary nature of the crisis.
In the other cases, which amount to 87% of the branches of the manufacturing industry, there was an expansion of jobs in the year-on-year comparison. The highlights were pulp, paper and paper products (+36.4%), wood products (+34.5%), metal products (+32.2%), printing and reproduction (+31.7%) and non-metallic minerals (+25.95).
Although employment is on the rise, inflation has been eroding the average real income of the population and, consequently, compromising the expansion of labor earnings, the basis of household consumption. Another factor at stake is the stronger increase in informal employment, whose income tends to be lower and less regular than in formal jobs.
For the private sector aggregate, income actually received (adjusted for inflation) shrank -4.1% between Q3'20 and Q3'21. The falls in retail trade (-7.5%) and construction (-7.7%) were more intense, while in manufacturing the decline was milder (-2.7%).