Brazil’s Entrepreneur Confidence Index Grows for Second Consecutive Month

RIO DE JANEIRO, BRAZIL – The Industrial Entrepreneur Confidence Index (ICEI) rose 0.5 points from June to 57.4 points in July. This was the second consecutive increase in the indicator, which is now 2.9 points above the historical average of 54.5 points.

This information contrasts with HIS Markit’s figures, which were published just a few days ago. HIS Markit said that Brazilian companies are less confident in June, with subdued demand conditions, political and economic troubles curbing optimism.

The data for the Industrial Entrepreneur Confidence Index (ICEI) are from a survey conducted by the National Confederation of Industry (CNI) and released on Thursday, July 18th. Survey indicators range from zero to a hundred points. When they are above fifty points, they demonstrate confidence among entrepreneurs.

According to the survey, industrial optimism increased as a result of improved industry expectations for economic and business performance over the next six months. The expectations index rose from 61.7 points in June to 62.1 points in July.

“The outlook for the Brazilian economy has increased one point compared to June,” said Flávio Castelo Branco, CNI’s executive manager for economic policy.

According to Flávio, “this improvement may be linked to the prospects of passing the Social Welfare reform. The survey covered the first ten days of July when the bill was being put to a vote with very positive prospects for approval. The basic text of the Social Welfare reform was approved on the 10th, and the survey was carried out between the 1st and 11th of this month.

As for the current business and economic outlook, the survey showed a worsening. The current indicator of conditions fell from 47.6 points in June to 47 points in July and remains below fifty points, suggesting low confidence.

On the assessment by business category, the survey shows that confidence is higher for large companies, a segment where ICEI increased to 58.2 points this month. For medium companies, the index also rose and reached 57.5 points. As for small businesses, the ICEI decreased 0.4 points concerning June and stood at 55.4 points in July.

On a regional basis, the survey showed that confidence is higher among businesspeople in the Midwest, where the index reached 59.6 points. In the Northeast, it climbed 1.4 points from June to 58.2 points in July. In the North, this month’s indicator was 57.7 points, in the South, 57.1 points, and in the Southeast, 56 points.

According to Castelo Branco, information on confidence is essential as it points to the willingness of entrepreneurs to take risks and carry out investment projects, increase production, and hire workers. “A businessperson who is confident in the performance of his company and the economy is willing to carry out his projects. With little confidence, he becomes more conservative, more fearful of the future and, therefore, reduces investments,” he said.

This edition of ICEI interviewed 2,391 companies. Of these, 942 are small-sized, 904 are medium-sized, and 545 are large-sized.