Brazilian Industrial Confidence Hits Five-Year Low Amid High Rates and Slowdown

Brazil’s industrial sector faces mounting challenges as the Industrial Entrepreneur Confidence Index (ICEI), published by the national industry confederation, dropped to 48 points in April 2025.

This marks its lowest level since July 2020 and signals a clear lack of confidence among business leaders. The index, which surveys 2,500 companies, fell from 49.2 in March and now sits well below the neutral 50-point mark that separates optimism from pessimism.

Industrial firms cite persistent high interest rates and a stronger US dollar as key obstacles. The central bank’s benchmark rate stands at 14.25% and is expected to reach 15% by year-end, making credit expensive and dampening investment.

Broader economic expectations also deteriorated, with the relevant index falling to 41.1 from 43.0. Confidence in the current state of companies slipped to 46.6, and sentiment regarding the national economy dropped to 34.8.

Brazil’s economy grew strongly in early 2025, thanks to a rebound in agriculture. However, growth is projected to slow from 2.5% in the first half to 1.5% in the second half.

Industrial production remains mixed: machinery and automotive sectors show resilience, but extractive and textile industries contract. The manufacturing PMI remains above 50, indicating expansion, but new orders and output are losing momentum.

Inflation expectations for 2025 stand at 5.57%, and the Brazilian real continues to weaken against the dollar. Despite these headwinds, some sectors, such as capital goods and durable consumer goods, still find opportunities.

The overall outlook remains cautious as businesses brace for tighter financial conditions and global trade uncertainties.

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