Brazil: Trade confidence grows again after two months

RIO DE JANEIRO, BRAZIL – After falling in February and March, the Business Confidence Index (Icec) rose 2% in April, reaching 118 points and accumulating a four-month high of 0.86%. Despite the modest growth, the indicator, measured by the National Confederation of Trade of Goods, Services, and Tourism (CNC), showed a better result than the one registered in the first four months of 2021, when it fell by 9.24%.

Among the indices analyzed by the survey, the Current Conditions of the Trade Businessman stood out positively, with an increase of 4.2%. According to the CNC, the advance drew attention because it is the indicator that has registered the greatest dissatisfaction. The sub-index related to the economy contributed the greatest weight to the increase, having expanded 6.5%, well above the assessments regarding the sector (3.6%) and the company (3.3%).

The president of the CNC, José Roberto Tadros, evaluates that the more positive perception of the retailers may be related to Easter and Mother’s Day sales, in addition to the expectation for the thirteenth salary of retirees, the increase in the participation of consigned credit from 35% to 40% in indebtedness and the entry into the economy of the resources coming from the withdrawal of the FGTS.

“A factor that is also very relevant is the perception of effects resulting from the labor market dynamics, which has shown a gradual evolution,” he said in a statement.

POSITIVE EXPECTATIONS

According to CNC, the only decrease registered in the composition of the Icec was in the sub-index related to hiring employees in Intentions to Invest, which presented a retraction of 0.1%. The sub-index referring to the company, on the other hand, had the most significant increase, of 3.9%, influencing the overall growth of the indicator of 1.6%.

For the CNC economist responsible for the survey, Antonio Everton, the results show optimism concerning the sales dynamics for next month. “The rise may be associated with adjustments and increments that entrepreneurs intend to make in their organizations.”

The data also indicated a higher level of confidence among micro and small business owners (2.1%), while those of medium and large companies showed no variation. In the cut by categories of use, entrepreneurs in the semi-durable (5.9%) and durable (5.8%) segments were much more confident than those in non-durable goods (0.9%).

In this aspect, the economist evaluates that one of the possible reasons for the increase is the exchange rate appreciation, with the dollar’s fall, and the greater expectation regarding the possibility of sales of electrical and electronic products. “All this has been occurring due to the understanding that the current conditions are more favorable, with a greater effect inherent to the economy’s performance, whose evolution may lead to an improvement in the performance of the commercial sector,” said Antonio Everton.

With information from Agência Brasil