Business confidence starts 2024 on a high note

Industrial confidence rose 1.8 points in January, reaching 97.4 points, the highest level since September 2022.
Economics
02 February 2024
Business confidence starts 2024 on a high note

FGV IBRE’s Business Confidence Index rose 0.4 points in January, to 95.1 points, the highest level since October 2022. In terms of three-month moving averages, the indicator increased 0.5 points in January.

“Despite reaching its highest level in 15 months, the Business Confidence Index remains below the neutral level of 100 points, signaling a tepid pace of economic activity at the start of 2024. One piece of good news is the improvement in the Expectations Index, which surpassed the Current Situation Index for the first time since October 2022. The improvement in expectations regarding the business environment in the first half of the year was driven by increased optimism in industry and commerce, which also helped reduce the dispersion between the confidence indexes of the four broad sectors,” says Aloisio Campelo Jr, FGV IBRE’s statistics superintendent.

In January, the Business Expectations Indexes rose 1.6 points to 95.5 points. Looking at its different components, there was a 2.4-point increase in the Forecast Demand indicator, to 95.2 points, and a 0.8-point rise in the Business Trends for the Next Six Months indicator, which reached 96.0 points. On the other hand, the Current Business Situation Index fell 0.8 points in the month, to 94.8 points. This drop was mainly driven by the component measuring perceptions of the current level of demand, which fell by 1.2 points. There was also a 0.4-point decline in the Current Business Situation indicator. The two components reached 94.2 and 95.4 points, respectively.

The Business Confidence Index combines confidence indexes for the four broad sectors covered by FGV IBRE’s business surveys: Industry, Services, Commerce and Construction.

Industrial confidence rose 1.8 points in January, reaching 97.4 points, the highest level since September 2022. Confidence in Commerce and Services also advanced, with increases of between 1 and 2 points, reaching 90.5 and 95.7 points, respectively. In contrast to the other surveys, the Construction confidence index remained relatively stable, going up just 0.2 points, to 95.8 points, but it is still the second highest out of the four broad sectors.

In January, business confidence improved in 61% of the Business Confidence Index’s 49 segments, a spread identical to that seen in the previous month. There was a notable increase in upward diffusion in the Services sector and a drop in Commerce.

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