The Industry Confidence Index (ICI) of FGV’s Brazilian Institute of Economics (IBRE) fell by 0.7 points in May 2019, reaching 97.2 points.

“Industry expectations have continued to worsen in May and now present a slightly pessimistic entrepreneurial class over the coming months. As for the industry’s performance in the month, the signs are dubious. After months of little variation, the capacity utilization level has risen again, but there has been an accumulation of unwanted inventories,” said Aloisio Campelo Jr., Superintendent of Public Statistics at FGV IBRE.

In April, the confidence rate fell in 10 of the 19 segments surveyed. The Current Situation Index (ISA) remained stable at 98.5 points. The Expectations Index (IE) fell by 1.5 points, reaching 95.9 points.

The indicator that measures the industry’s contracting prospects for the next three months declined by 3.6 points, exerting the main influence on the negative result of the IE in the month. The share of companies forecasting an increase in the number of employed persons fell from 17.6% to 13.9% between April and May, while those forecasting decreases increased from 16.8% to 17.1% of the total. To a lesser extent, the indicator that measures entrepreneurs’ optimism in relation to the evolution of the business environment in the six months also fell, from 100.0 points in April to 98.4 in May, indicating a slight degree of pessimism.

Regarding the current situation, there was a decrease of 2.9 points in the inventory level indicator (101.7 to 98.8 points). The other two variables went in the opposite direction, leading to ISA stability in the month.

The Installed Capacity Utilization Level (NUCI) rose by 0.8 p.p. between April and May, returning to 75.3%, the same level as that of November 2018.

The full study is available on the website.