RIO DE JANEIRO, BRAZIL – The Business Confidence Index (ICE) of the Brazilian Economic Institute of the Getulio Vargas Foundation (FGV Ibre) increased by 4.3 points to 98.8 points in June, reaching the highest level since December 2013; after the third consecutive high, the average of the second quarter of 2021 exceeded that of the previous quarter by 7.2 points.
According to FGV Ibre, another highlight in June is the services sector. “After the third consecutive expressive high, sector confidence reaches the highest level since the beginning of the pandemic. It should be emphasized that the recovery of this sector continues to be heterogeneous, with segments of services to families progressing more slowly and under the still predominant influence of expectations.”
FGV Ibre’s member Campelo Jr. points out that the acceleration of the immunization program “is essential for the normalization of activity levels in this segment in the second half of the year.”
The increase in ICE was driven by improvements in both assessments about the current moment and expectations for the coming months. The index of the current business situation (ISA-E) increased by 4.3 points to 98.1 points. The expectations index (IE-E) is up 4.4 points to 100.9, its highest level since February 2020.
All of the sectors that make up the ECI posted increases during the month. In all cases, the increase was due to both improved assessments of the current business situation and short-term expectations, with the exception of trade in the latter case. The manufacturing and services sectors accounted for more than 80% of the month’s change in confidence.
Business confidence increased in 82% of the 49 segments that make up the ICE in June. Among the major sectors, only trade saw a decrease in the distribution of increases across segments.
The Business Confidence Index (ICE) consolidates the confidence indices of the four sectors covered by the business surveys produced by FGV IBRE: Industry, Services, Trade, and Construction.