Brazil’s Business confidence rises 0.3 points in August
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Loading... - Gregor Berger
- 02 Sep 2024
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In August, Brazil's Business Confidence Index (ICE) experienced a modest rise of 0.3 points, reaching 97.9 points, marking its highest level since September 2022, according to the Getúlio Vargas Foundation (FGV). This increase continues a trend of growth, with the index climbing by 4.3 points over six consecutive months.
Aloisio Campelo Júnior, the superintendent of Public Statistics at the Brazilian Institute of Economics of FGV (Ibre/FGV), highlighted that this steady increase in business confidence reflects a more robust growth in cyclical segments of the economy compared to the previous year. Particularly, the Manufacturing Industry has shown clear signs of recovery, evidenced by low inventory levels and a high utilization rate of installed capacity.
The August rise in the Current Situation Index (ISA-E) by 0.7 points, reaching 98.7 points—the highest since December 2013—suggests a favorable level of economic activity in the third quarter. However, there are still challenges, including a low level of confidence in the Commerce sector and a slight 0.1-point drop in the Business Expectations Index (IE-E) to 97.1 points after five months of increases.
The ICE draws from surveys across the Industry, Services, Commerce, and Construction sectors, with each sector's contribution weighted according to its economic significance based on data from the Brazilian Institute of Geography and Statistics (IBGE). The index aims to provide a consistent assessment of economic activity.
In terms of sectoral performance:
- Services saw a slight confidence increase of 0.4 points, reaching 94.6 points.
- Commerce experienced a significant decline of 1.8 points, falling to 89.1 points.
- Industry remained stable at 101.7 points.
- Construction saw a minor increase of 0.2 points, reaching 97.5 points.
Despite overall confidence increases in 47% of the 49 segments that constitute the ICE, there was a notable decrease in the spread of growth across all sectors, with Commerce being particularly impacted, as all its segments saw a decline in August.
The data for this analysis was collected from 3,707 companies across the four sectors between August 1 and 26.
