Today's Letter IEDI updates the Institute's monitoring of industrial employment in the country and analyzes developments throughout 2022, with an emphasis on the last quarter of the year. The study is based on the microdata of the continuous PNAD, released by the IBGE, which allows greater detail of the statistics released monthly, which are the subject of IEDI Analyses.

The year 2022 was a period of revival of employment, as we have discussed on other occasions, leveraged mainly by the normalization of service activities, once the COVID-19 pandemic was under control. In addition, there was a qualitative improvement, with formal jobs expanding more strongly. The industry, as a more formalized sector, contributed to this process.

Occupation in the private sector grew 7.8% in 2022 as a whole, equivalent to an additional 6.2 million employed people compared to 2021. The highest results came from services (+10.2%) and retail trade (+9.4%). In the manufacturing industry, the increase in employment was of 6.1% (654,000 more people employed). 

Taking jobs with formal contracts, the increase in the private sector as a whole was of 9.2% and in manufacturing of 8.0%. The industry, however, created proportionally more formal jobs: 84% of all additional posts created in the industry between 2021 and 2022 were formal vis-à-vis 47% in the private sector aggregate. 

As a result, the industrial sector continued to have the higher share of employees with a signed contract: 65.6% in the 2022 average (+1.1 p.p. compared to 2021) versus 38.1% in the private sector, excluding manufacturing.

It should be noted that throughout 2022 employment performance was following the weakening of economic growth. From Q3'22 to Q4'22, the expansion in the number of private sector employees decreased from +6.5% to +3.4%, largely due to services, whose result went from +9.9% to +5.8% in the period.

In the manufacturing industry, this loss of dynamism in employment was softer, going from +3.6% in Q3'22 to +3.2% in Q4'22 and formal jobs continued to advance at a higher pace, even in face of the accommodation: +7.5% in Q3'22 and +5.5% in Q4'22. Therefore, the share of formal jobs in industrial occupation rose from 65.2% in Q1'22 to 66% in Q4'22.

Although at a slightly lower growth rate, the increase in employment in manufacturing proved more widespread. In Q3'22, 65% of industrial branches had increases in the number of employees, which rose to 76% in Q4'22. Among the highest rates at the end of the year, the highlights were: computer and electronics (+35.1%), metallurgy (+25%) and pharmaceuticals and pharma-chemicals (+24.6%).

Regarding the classification of industrial branches by technology intensity, all four groups saw formal employment grow in 2022. High technology was the best performer, as it had lower bases of comparison. Jobs in this category grew 8.7% in the year and 28% in Q4'22, compared to the same period of the previous year.

The medium-high range had the most consistent dynamism, growing 8.4% in the average of 2022 and 8.5% in the last quarter of the year. In contrast, the medium technology-intensity industry, although advancing more than the industry aggregate in 2022 and also registering +8.4%, showed a strong deceleration in Q4'22: +3.5%.

Finally, the medium-low intensity group was the only one to expand less than the total industry, registering +7.6%. In addition, it also had a significant loss of dynamism at the end of the year: +3.5% compared to Q4'21. Much of this was due to the food industry.

As for labor real income—either due to the improvement in the quality of employment (formal occupations) or due to the slowdown in inflation, based on policy measures taken by the government, especially reduction of fuel taxes—there was growth.

The usual real average income of those employed in the private sector grew in Oct–Dec'22 (+9.5%) for the second consecutive quarter, in the year-on-year comparison, and in manufacturing (+5.5%) the first positive result since Q4'2020 was observed. There was an increase in 56% of industrial branches in the last quarter of 2022.

The usual total real income, both in manufacturing (+8.9% in Q4'22) and in the private sector as a whole (+13.8%), grew strongly, due to the increase in both employment and average income.

The full text is available in Portuguese.