The Trade Confidence Index (ICOM) calculated by FGV’s Brazilian Institute of Economics (IBRE) rose 1.1 points in August, climbing from 88.8 to 89.9 points. This is the indicator’s first positive result after a string of four consecutive drops, with an accrued loss of 8.0 points.

“The improvement in Trade confidence in August is small compared to the recent negative results. Despite still considering the current situation to be unfavorable, companies already show signs of an improvement in expectations for the coming months. The combination of results shows that the industry is still recovering at a slow pace, amidst widespread uncertainty and a sluggish job market”, said Rodolpho Tobler, Coordinator of the IBRE’s Trade Survey.

The increase in confidence was seen in 10 of the 13 segments surveyed in August. The Expectations index (IE-COM) rose 2.8 points, up to 94.6 points, driven by both an improvement in the expected sales indicator – which rose 2.3 points, up to 93.4 points – and by the business trend indicator for the next six months, which increased 3.2 points, up to 96.0 points.

The Current Situation Index (ISA-COM) fell 0.8 points, down to 85.7 points – the lowest level since December 2017 (85.6 points). Among its components, the entrepreneurs’ perception indicator with the volume of demand at the moment fell 0.4 points, down to 85.9 points, and the current business situation indicator fell 1.2 points, reaching 85.9 points.

Discomfort Indicator

Despite the ICOM’s positive development having been entirely motivated by the increase in the IE-COM, some Trade Survey indicators of the perception about the current situation also gave signs of improvement in August. While the ISA-COM dropped continuously in the past four months, the Business Discomfort Indicator recorded a slight decrease after increasing for six months. The decrease in the indicator in August is due to less mentions of insufficient demand, financial cost and access to bank credit as factors preventing business expansion.

The August 2018 edition collected data from 1.206 companies between August 1 and 22. The next Trade Survey results will be published on September 26, 2018.