The Service Confidence Index (SCI) fell by 3.1 points in May, reaching to 89.0 points and returning to the level of May 2018 (89.0 points). In the cumulative rate for the last four months, there was a loss of 9.2 points, returning to the rate of 9.3 points, between October and January. In quarterly moving averages, the Index declined for the third consecutive time, this time by 2.5 points.

“The fourth consecutive drop in service confidence suggests that the period of low activity that the sector has been facing persists. The combination of the slight decrease in the Current Situation Index with a significant drop in the Expectations Index shows that service entrepreneurs are not comfortable with the situation in the sector and are becoming less optimistic regarding business evolution in the coming months. The overall result of the survey signals a slow recovery of the economy throughout 2019,” said Rodolpho Tobler, economist at FGV IBRE.

The drop in SCI in May was widespread, reaching 12 of the 13 activities surveyed. The result was a drop of 5.1 points in the Expectations Index (IE-S), reaching 92.0 points, and a drop of 0.9 point from the Current Situation Index (ISA-S).

The IE-S retreat was influenced both by the indicator that measured the optimism with the business trend in the following six months and by the expected demand indicator in the following three months, which fell by 6.8 and 3.3 points, respectively, reaching 91.7 and 92.4 points.

The drop in the Current Situation Index (ISA-S) was exclusively due to the current business situation indicator, which fell by 2.6 points, reaching 85.3 points.

The Installed Capacity Utilization Level (NUCI) of the Services sector rose by 0.3 percentage points, after falling by 1.3 percentage points last month. The NUCI was 82.0%.

With the new decrease of the SCI in May, the index had a cumulative loss of 9.2 points between February and May of this year. The result virtually offset all the increase reported in the period between October 2018 and January 2019 (9.3 points). In the comparison between the two periods, we highlight the higher volatility of IE-S. In the first four months after the election, this index rose by 15.8 points. In the following four months, in turn, it decreased by 15.1 points. In the case of ISA-S, these figures were 2.6 and -3.0 points. These movements were disseminated among the main segments of the sector.

The May 2019 edition collected information from 1887 companies between the 2^nd and 24^th of this month. The next announcement of the Services Survey will take place on June 28, 2019. The full study is available on the website.