The Business Confidence Index (ICE) of Fundação Getulio Vargas’ Brazilian Institute of Economics (IBRE) fell by 2.0 points in May, reaching 91.8 points, the lowest level since October 2018. In the quarterly moving average metric, the Index decreased for the third consecutive time, by 1.6 points.

“Business confidence has fallen by 5.7 points since January, virtually offsetting the increase of 6.3 points between October 2018 and January this year, marked by the honeymoon period between the markets and new Administration. The overall result continues to portray an economy with a weak level of activity and, even worse, a picture of relative pessimism with the possibility of a consistent acceleration in the coming months. In a way, this moderate pessimism may be contributing to keeping the economy going in the second quarter,” said Aloisio Campelo Jr., Public Statistics Superintendent at FGV IBRE.

The Business Confidence Index (ICE) consolidates the confidence indexes of the four sectors covered by the Business Surveys produced by FGV IBRE: Industry, Services, Trade, and Construction.

The Current Situation Index fell 0.7 point in May to 89.5 points, returning to the level of October 2018. The Expectations Index (IE-E) fell for the third consecutive time, by 2.2 points, reaching 96.1 points, also the lowest level since October last year.

In May, a decrease was reported in all sub-indices that make up the ICE. In Industry, the decrease of 0.7 point was determined by the worsening of expectations. In the services sector, confidence fell for the fourth consecutive time, accumulating a loss of 9.2 points, almost identical to the increase of 9.3 points between October 2018 and January 2019. In Trade, there was a decrease of 5.4 points, and in Construction, of 1.8 point. In the quarterly moving average metric, all sectors are showing a decrease.

In May, confidence advanced in only 27% of the 49 segments that make up the ICE. The month’s highlight is Trade, a sector in which all segments reported a decline. Last month, the spread of the increase had reached 47% of the segments.

The full study is available on the website.