Trade confidence improves in January 2020

This improvement in the index was influenced by favorable results from the Expectations Index (IE-COM), which rose 3.8 points, from 100.6 to 104.4 – the highest level since March 2019 (104.7) and the eighth result in a row above 100.
Economics
28 January 2020
Trade confidence improves in January 2020

The Trade Confidence Index (ICOM), calculated by the FGV´s Brazilian Institute of Economics (FGV IBRE), rose 1.3 points in January 2020, from 96.8 to 98.1 – the highest level since February 2019 (99.8 points). In terms of quarterly moving averages, the index gained 0.2 points, remaining relatively stable in recent months.

“2020 has begun with improved confidence regarding trade, influenced by better expectations, which have rebounded again after a period in which business people were waiting at the end of last year. On the other hand, current situation indicators, which had presented more positive results in late 2019, have fallen back in January. This combination of results shows that the gradual recovery is continuing, but it still depends on stronger signs from the labor market and consumer confidence,” says Rodolpho Tobler, FGV IBRE’s trade survey coordinator.

In January, confidence increased in four out of six segments of the economy. This improvement in the index was influenced by favorable results from the Expectations Index (IE-COM), which rose 3.8 points, from 100.6 to 104.4 – the highest level since March 2019 (104.7) and the eighth result in a row above 100. The Current Situation Index (ISA-COM) declined 1.1 points, from 93.0 to 91.9.

ISA-COM also fell in January in terms of quarterly moving averages (down 0.5 points from December). A negative result was also recorded for the Broad Retail Stress Indicator (composed of average standardized figures for insufficient demand, access to bank credit, financial costs and business improvement limitations). The increase in this indicator (in quarterly moving averages) shows that business people continue to find limitations in the business world. Although the current level is below that recorded in January 2019 (5.0 points below), the indicator rose 1.0 point in January 2020, after eight consecutive declines.

The complete study is available here.