Business Confidence reaches highest level since March 2014, says FGV

Source: Agência Brasil

The Business Confidence Index (ICE) reached 95.9 points, up 1.0 in December and reaching the highest level since March 2014's 97.8. In the quarterly moving average metric, the index advanced 1.9 Score.

The data are part of the Business Confidence Index Surveys, and were released today (2), in Rio de Janeiro, by the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV IBRE).

The ICE consolidates the confidence indices of the four sectors covered by the Business Surveys produced by FGV IBRE: industry, services, commerce and construction.

The data indicate that the Current Situation Index (ISA) reached 91.2, up 1.1 point, the highest value since June 2014's 92.8 points.

The Expectations Index (EI-E) advanced 0.2 point, reaching 101.0. It is the second consecutive month in which the IE-E exceeds 100 points.

In the opinion of the Superintendent of Public Statistics at FGV, Aloisio Campelo Jr., the business confidence index is approaching normality.

“After the third consecutive rise, business confidence is approaching levels that portray a situation of normality,” he said in an interview with Agência Brasil.

For him, the second good news of December was that the index that measures the perception of the current moment (ISA) advanced more than the expectations index (IE), “which happens for the first time since July 2018”.

The economist stated, however, that, despite these verifications, “the distance still greater than 15 points between ISA and IE in trade and construction suggests that the recent gains in confidence must be explained by an effective gradual improvement of the economic environment, but also by the favorable effect of the end of the electoral period on expectations”.

Trust by sectors

The FGV study also indicates that, for the second consecutive month, there was an increase in confidence at the margin in all sectors that make up the ICE.

In the quarterly moving average metric, the change was negative only in the industry, with a drop of 0.4 point. With a considerable rise in the month, trade confidence passes 100 points for the first time since March 2014.

Industry and services have advanced less and have very similar levels of trust. Construction confidence rose for the fourth month in a row, but remains the lowest among the four sectors.

Diffusion of Trust

In December, there was a rise in confidence in 65% of the 49 segments that make up the Business Confidence Index.

Last month, however, the high had reached 84% of the segments.

For the November 2018 edition, information was collected from 4,701 companies between December 3 and 21. The next ICE release will be on January 31, 2019.