Reuters reported that as rust colored iron ore trains still rumble through Volta Redonda, workers in this steel town are feeling the strain as economic crisis slams the brakes on the industries that fuelled Brazil's recent boom.

Plunging factory output and mounting job losses show that Brazil’s economy is being hit hard, only four months after President Mr Luiz Inacio Lula da Silva dismissed the market turmoil as a US problem with the words ‘what crisis’.

In Volta Redonda, a centre of Brazilian industry where few people's lives are untouched by dominant steel firm Companhia Siderurgica Nacional, the announcement last month of 300 job cuts has sent shivers through the community.

Another 3,000 workers were put on temporary leave last month by CSN, which has about 8,000 workers at its main plant here about 90 miles northeast of Rio de Janeiro, and the union fears 1,800 more jobs will go this month.

But the job losses at CSN are part of a growing toll and the severity of the crisis has taken the government by surprise as industries all over Latin America reel from tumbling exports and scarce credit for businesses and consumers alike.

The economy lost 655,000 jobs in December 2008, the biggest fall in a decade. A 6.2% yearly drop in industrial output in November 2008 was the worst since 2001, and double digit plunges in Asian countries' factory output underscore how the crisis has spread from the United States and Europe to most of the world.

(Sourced from Reuters)