Business Confidence in Brazil rises and partially recovers drop in June
The Business Confidence Index (ICE), calculated by FGV’s Brazilian Institute of Economics (IBRE), rose 0.9 points in July, up to 91.6 points, recovering part of the 2.0-point drop in the previous month. In quarterly moving averages, the index fell for the fourth consecutive month (-0.6 point).
“The increase in business confidence in July confirms the gradual recovery of the productive sector, after the setback caused by the truck drivers’ strike in late May. The result has positive and negative aspects. The upside is the increase in the Current Situation Index (ISA) to its highest level since July 2014, indicating that the economic wheel is turning, albeit still very slowly. The downside is the third consecutive drop in the Expectations Index (IE), indicating that the weaker optimism is unlikely to be reversed until uncertainties surrounding the upcoming elections fade away”, said Aloisio Campelo Jr., Superintendent of Public Statistics at IBRE.
The Business Confidence Index (ICE) consolidates confidence indexes across four sectors covered by the IBRE’s Business Surveys: Industry, Services, Trade and Construction.
The largest contribution to the increase in the ICE came from the Current Situation (ISA-E) sub-index, which rose 1.1 point, up to 90.3 points – the highest level since July 2014 (90.7 points). The Expectations Index (IE) varied -0.2 point, down to 97.2 points, following the downward trend started in May.
Among the sub-indices, the Construction Confidence Index (ICST) had the biggest increase in the month (1.7 point, up to 81.0 points), but still remains the lowest among all four sectors. The 0.8-point increase in the Services Confidence Index (ICS) was the main driver behind such increase in the aggregate index. The Trade Confidence Index (ICOM) dropped -0.8 point, while the Industry index remained stable.
Only 63% of the 49 sectors covered by ICE showed high confidence in July. Based on quarterly moving averages, the ratio of segments on the rise increased compared to the previous month, from 36% to 46% of the total.
The July 2018 edition of the index surveyed 4,835 companies between July 2 and 25. The next ICE will be released on August 30, 2018.
Go to the website to read the complete study, available in Portuguese.
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