Brazil’s industrial confidence slumps to lowest level in 5 months, says FGV

RIO DE JANEIRO, BRAZIL – Confidence in services also retreated in February for the second consecutive month.

Industrial confidence in Brazil shrank for the second time in a row in February amid general dissatisfaction and reached its lowest level in 5 months, according to data from the Getúlio Vargas Foundation (FGV), released on Friday, February 26th.

The Industry Confidence Index (ICI) dropped 3.4 points to 107.9 in February, its lowest level since the 106.7 points posted in September 2020.

“Industrial confidence fell for the second consecutive month influenced by a drop in entrepreneurs’ satisfaction regarding the current moment and a reduction in optimism about the coming months,” said Viviane Seda Bittencourt, coordinator of the FGV Ibre surveys.

There was a drop both in the perception of the current situation (-1.4 points) and in the outlook for the coming months (-5.4 points).

The production of Brazilian industry posted its 8th consecutive increase in December, yet closed 2020 with the largest drop in four years, down 4.5%, due to the impact of the coronavirus pandemic.

Services

Perception in services also worsened this month: the confidence index fell 2.3 points to 83.2, in the second straight monthly drop. The Present Situation Index (ISA-S) dropped 1.4 points to 78.6 points, while the Expectations Index (IE-S) dropped 3.3 points to 88.0.

“The sector, particularly in terms of services provided to families, has suffered the most in the pandemic,” explained Rodolpho Tobler, economist at FGV Ibre.

“Despite the start of vaccination, the surge in the number of cases and the speed of immunization of the population should determine the pace of recovery considering that this directly impacts consumer caution,” he added, noting that the road ahead is “quite challenging.”

One year after the first case of Covid-19 was recorded in the country, Brazil counts over 250,000 deaths and a disease that is out of control, and several states are experiencing a second wave worse than the first with the virus advancing through cities in the interior and with the spread of a new, more transmissible variant.

Source: G1