The Trade Confidence Index (ICOM) of FGV’s Brazilian Institute of Economics (IBRE) rose 6.9 points in November, up from 92.5 to 99.4 points – the highest level since March 2014 (101.9 points). In quarterly moving averages, the indicator rose for the second time in a row (3.2 points).

“The last two positive results in trade confidence suggest that the worst may already be behind us. The upsurge in November confirms the recovery in confidence within the sector, apparently driven mainly by improved expectations following the end of the election race. New advances will depend on whether the job market continues to recover and uncertainty continues to drop”, said Rodolpho Tobler, Trade Survey Coordinator of FGV’s IBRE.

The confidence upturn in October spread across 10 of the 13 segments and was driven both by the improved perception among business owners regarding the current situation and short-term expectations. The Current Situation Index (ISA-COM) rose 5.1 points, up to 93.3 points – recording its second consecutive increase. The Expectations Index (IE-COM) also recorded its second increase in a row, rising 8.4 points and reaching 105.5 points – the highest value since September 2012 (106.0 points).

The positive ISA-COM results in the last couple of months suggest an improvement in the sector’s sales figures after a troubled period. The Trade Discomfort Index (sum of insufficient demand, access to bank loans, and financial costs with limitations and business improvement) follows this same trend. The indicator’s improvement in quarterly moving averages for the last four months was crucial to reduce complaints regarding insufficient demand. In July, 37.0% of companies considered demand to be a factor restricting business improvement; this figure dropped to 27.5% in November – the lowest level since January 2015 (26.3%).

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