Business confidence reaches highest level since December 2013
FGV IBRE’s Business Confidence Index rose 4.3 points in June, to 98.8 points, the highest level since December 2013. After the third consecutive increase, the average figure in the second quarter of 2021 surpassed that of the previous quarter by 7.2 points.
“The increase in business confidence reflects the continuity of the economic recovery phase, led by industry, which since October 2020 has experienced its highest average levels of confidence since 2011. Another highlight of FGV IBRE’s business surveys in June was the service sector. After the third significant increase in a row, the sector’s confidence reached the highest level since the beginning of the pandemic. It should be noted that this sector’s recovery continues to occur unevenly, with the “services provided to families” segment advancing more slowly, held back mainly by expectations. It is essential to accelerate the vaccination program in order to normalize the activity level in this segment in the second half of this year,” said Aloisio Campelo Jr., FGV IBRE’s statistics superintendent.
The Business Confidence Index combines confidence indexes for the four broad sectors covered by FGV IBRE’s business surveys: Industry, Services, Commerce and Construction.
The increase in the Business Confidence Index was driven by improvements in both current situation perceptions and expectations for the coming months. The Current Business Situation Index rose 4.3 points, to 98.1 points. The Expectations Index went up 4.4 points, to 100.9 points, the highest figure since February 2020.
All the sectors that make up the Business Confidence Index increased in June. In all cases, this increase was driven by both improved assessments of the current state of business and short-term expectations, with the exception of commerce in the latter case. Industry and services contributed more than 80% of the improvement in confidence in the month.
In June, business confidence improved in 82% of the 49 segments that make up the Business Confidence Index. Among broad sectors, there was only a reduction in the diffusion of this increase among the commerce-related segments.
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