The Business Confidence Index (ICE) rose 2.9 points in May compared to April, to 97.4 points, informed the Fundação Getulio Vargas (FGV) this Wednesday. In quarterly moving averages, the indicator increased by 2.1 points in the month.
“Business confidence rises for the third consecutive month, consolidating the recovery started in March. In Industry and Services, the indices are approaching the neutral level of 100 points, suggesting the normalization of activity, a movement that in industry has been driven by favorable assessments in relation to external demand and by the greater balance of inventories, while in Services, the Confidence numbers show that, until further notice, the sector would have left the pandemic behind. The overall result suggests that the economy has been growing at a moderate pace in the second quarter,” said Aloisio Campelo Júnior, Superintendent of Public Statistics at the Brazilian Institute of Economics at FGV (Ibre/FGV), in an official note.
The Business Confidence Index gathers survey data from Industry, Services, Trade and Construction. The calculation takes into account the weights proportional to the participation in the economy of the investigated sectors, based on information extracted from the annual structural surveys of the Brazilian Institute of Geography and Statistics (IBGE). According to FGV, the objective is for the ICE to allow a more consistent assessment of the pace of economic activity.
The Present Business Situation Index (ISA-E) grew 2.4 points in May compared to April, to 98.1 points. The Expectations Index (IE-E) advanced 3.7 points to 98.1 points. “This is the first time since February 2014 that both indicators are at the same level”, stressed the FGV, in a note.
Among the large sectors that make up the ICE, only construction showed a reduction in confidence in May, a drop of 1.4 points compared to March. Business confidence rose 7.4 points in May compared to April, while services increased 2.1 points. The industry had an increase of 2.3 points.
“The increase in confidence in the Commerce and Services sector was driven by the release of additional resources in the quarter to stimulate demand”, justified the FGV. In May, confidence increased in 30 of the 49 segments that make up the ICE.
The collection of the Business Confidence Index gathered information from 3,951 companies in the four sectors between May 1st and 26th.
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