Brazil: Small business confidence remained stable in October
RIO DE JANEIRO, BRAZIL – The Confidence Index for Micro and Small Companies (IC-MPE), which aggregates the indexes of the 3 main economic sectors (trade, services, and manufacturing) remained at 98.7 points in October.
According to SEBRAE, despite the stability compared to September, entrepreneurs’ confidence has shown a “sustained growth” since early 2021. In January, the index stood at 90.8. According to the entity, this confirms a consistent rebound of small businesses, but it also indicates that there is still some insecurity among entrepreneurs, given the high inflation and economic instability.
SERVICES
According to the survey, the services sector posted an increase in the confidence index for the 7th consecutive month, reaching 99.1 points in October. There was a 2.3 point increase from September, the highest index since December 2013, when it reached 100.2 points.
“The rise in the MPE-Services was due to the current perception of activities by small business owners,” SEBRAE explained.
The MSE-Services Current Situation Index increased 6 points, reaching 97. According to the entity, this result was influenced both by the companies’ perception of improvement regarding the volume of current demand, whose index rose 7.3 points, and the current business situation, which advanced 4.8 points.
The rise in hiring expectations by these entrepreneurs also grew for the 5th consecutive month and reached its best result in 8 years. Some 22% intend to hire again, according to SEBRAE.
The highlights for the improved confidence in this sector were information, household and transport services. The other services segment remained relatively stable, dropping 0.2 points. While business confidence in the professional services segment retreated 1.1 points.
COMMERCE AND INDUSTRY
The Small Business Confidence Index for commerce in October remained stable at 92.9 points. Despite a drop in the Present Situation Index and in the indicator that measures the volume of current demand, the Expectations Index advanced 3.3 points to 91, recovering part of the losses suffered in September.
According to SEBRAE, this perception of improved expectations may be related to the decrease in the number of cases and deaths related to Covid-19 and to the easing of restrictive measures, with entrepreneurs focusing on year-end sales.
The confidence of micro and small companies in the manufacturing industry, the MPE-Industry, maintained its downward trend for the 3rd consecutive month, dropping 3.6 points, to 98.4, moving into the pessimism zone.
According to SEBRAE, this worsening of short-term expectations in the sector was a major factor in the drop in confidence. All indicators that make up the index fell, with emphasis on the production indicator for the next 3 months, which fell 7.6 points, to 96.7.
Clothing companies were the most negatively impacted in October, when confidence fell 9.1 points to 90, the lowest level since June 2021, at 80.9.
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