FGV’s Brazilian Institute of Economics (IBRE) will start to publish the Business Confidence index (ICE), an aggregation of synthesis-indicators of four business surveys conducted by the Institute. In May, the ICE advanced 1.2 points compared to the previous month, reaching 86.4 points, the highest level since December 2014 (87.7 points).

“In May, business confidence maintained the uptrend recorded since early this year. The good news is the massive reduction of the gap, which is still large, between the level of indicators gauging perception surrounding the present and expectations. The bad news is that most of the data collection for this month had already been completed when a new political crisis sparked in the country, on May 17. The higher level of uncertainty caused by events of this nature tends to negatively affect expectations,” said Aloisio Campelo Jr., Superintendent of Public Statistics at IBRE.

The Business Confidence Index (ECI) consolidates the confidence indexes of four macro-sectors covered by the business surveys conducted by IBRE: Industry, Services, Commerce, and Construction. The aggregation is calculated with economic weights, based on data extracted from IBGE’s annual structural surveys for the four sectors. The weighting variable of the sectors is the value added, except for the Commerce Sector, whose weight is determined by the trade margin. The complete series of business confidence indicators will be seasonally adjusted every month.

Considering the survey’s different time periods, the largest contribution to higher confidence in May comes from the Current Situation Index (ISA-E), showing an increase of 1.1 points, totaling 80.2 points. The Expectations Index (IE) rose 0.3 point, reaching 95.0 points. The gap between the current perception and the expectations of business owners is also seen in the four surveys that make up the business result. Construction is the survey with the greatest gap between expectations and current perception, totaling 20.9 points; followed by Services, with 13.8 points; Commerce, with 11.9; and Industry, which shows a smaller gap of 6.7 points.

The business confidence increased in Industry and Services, the two segments with highest weight. There was a slight decrease of -0.5 point in Commerce, after an accrued increase of 10.2 points in the past three months. Construction continues showing results below the other sectors, indicating that the sector is still in recession. To calculate the Business Confidence Index, 4932 companies from all four sectors were surveyed on May 2 and 25.

The complete results are available, in Portuguese, on the website.