Brazil’s Industrial Confidence Slumps for Eighth Month as Costs and Trade Pressures Mount

Brazil’s industrial leaders have spent most of 2025 losing faith in the economy, and new data confirms the downturn is not easing.

The Industrial Entrepreneur Confidence Index (ICEI), compiled by the Confederação Nacional da Indústria, fell to 46.1 points in August — well below the neutral 50 mark for the eighth month in a row.

The ICEI reflects whether business leaders feel confident (above 50) or pessimistic (below 50) about present conditions and the near future. August’s reading, the lowest this year, signals that most industrial companies now expect tougher times ahead.

The drop comes from both sides of the index. The Expectations component fell to 47.8 points. Sentiment toward the broader Brazilian economy sank to 38.6, deep in negative territory.

Even confidence in companies’ own prospects slipped to 52.4, barely above neutral. The Current Conditions component stayed weak at 42.6, with business leaders rating the country’s overall economic situation at just 34.8 points.

High borrowing costs remain the strongest drag. Brazil’s benchmark interest rate, at 14.75%, makes loans for investment and working capital prohibitively expensive for many firms. Inflation, at 5.4% in May, gives the central bank little room to cut rates soon.

At the same time, global trade frictions add further strain. Changes in export markets, including new restrictions in some partner countries, have pressured industrial shipments and weakened order books across manufacturing sectors.

CNI based the August index on interviews with 1,177 companies of all sizes, conducted between August 1 and August 7.

Their answers point to a broad-based caution: large, medium and small industries all report they are delaying investment, limiting hiring, and keeping production restrained until conditions improve.

Industry accounts for about one-fifth of Brazil’s GDP and supports millions of jobs. When confidence stays low for months, the effects seep through the economy. Suppliers receive fewer orders, job creation slows, and domestic demand weakens further.

Official forecasts still target Brazil’s GDP growth at around 2.2% to 2.4% this year. But the ICEI data shows that, inside the factory gates, optimism has largely vanished.

Until interest rates come down and trade conditions stabilize, industrial leaders see little reason to bet on a quick turnaround.

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