The Industry Confidence Index (ICI) of FGV’s Brazilian Institute of Economics (IBRE) rose 2.6 points in January 2019, up to 98.2 points – the highest level since August 2018.

“In January 2019, prospects regarding the current business situation continued to rise steadily, influenced by a weak economic pace – underlined by the lower Capacity Utilization Level in the month. But the industrial sector has showed some signs of an expected recovery in the coming months, following a sharp downturn in the second half of last year. Expectations spiked in January, including more optimistic outlooks on production and employment in the three-month horizon, as well as the evolution of the business environment over the next six months”, said Aloisio Campelo Jr., Superintendent of Public Statistics at the IBRE.

Confidence rose across 12 of the 19 industrial segments surveyed in January. The Current Situation Index (ISA) rose 1.0 point, up to 97.0 points, marking its third consecutive high. The Expectations Index (IE), in turn, rose 4.3 points and reached 99.5 points – the highest level since August 2017 (100.6 points).

The indicator that gauges satisfaction with current demand rose 1.6 points, up to 96.3 points – the main driver behind the ISA spike in January. The percentage of companies that rated “strong” rose from 11.4% to 14.2% in the month, while those that rated “weak” dropped from 18.1% to 17.7% of the total.

The indicator that measures the impact of new hires over the next three months was the main driver behind the IE’s upsurge in the month, interrupting the downward trend witnessed in previous months. The indicator rose 6.3 points, up to 97.1 points – the highest level since June 2017 (101.2 points). The percentage of companies predicting an overall staff increase rose from 12.9% to 19.8% between December and January, while those expecting a downsize dropped from 17.3% to 15.2% of the total. The Production Indicator for the next three months rose at a more moderate pace, as well as the Business Trend indicator for the next six months, although the latter has reached its highest level since April 2013 (106.7 and 108.0 points, respectively).

The Industry Installed Capacity Usage Level (NUCI) dropped 0.5 percentage point (p.p.) in January, down to 74.3% – the lowest level since September 2017 (74.0%).

Go to the website to read the complete study.