Confidence of Brazilian industry recovers in August, returning to optimistic levels

Confidence of Brazilian industry, one of the mainstays of Latin America’s largest economy, rose again in August and was in the optimistic range, the Getulio Vargas Foundation’s Economic Research Center (FGV) said Monday.

According to the report, the indicator rose from 99.5 points in July to 100.3 points in August, exceeding the 100-point threshold that separates pessimism and optimism in the industrial sector.

The FGV showed that the assessment of the current situation and expectations for the coming months improved: They increased from 101.4 to 102.8 points and from 97.6 to 97.9 units, respectively.

“The improvement in the business climate this month may have been influenced by the decompression of costs due to the fall in fuel and energy prices,” FGV economist Stefano Pacini said in a statement.

“Demand remains positive and inventories are balanced despite the still problematic situation for some types of products,” he added.

Brazilian industry is still recovering from the strong impact of the arrival of the new coronavirus in the country, according to Monday’s report, in which nine of the 19 industrial segments considered recorded an increase in confidence.

The utilization of installed capacity in the Brazilian industry remained stable during the period, falling 0.1 percentage points to 82.2 percent.

In the first half of the year, Brazilian industrial production decreased by 2.2 percent compared to the first six months of 2021.

In the last 12 months to June of this year, the indicator recorded a decline of 2.8 percent, 1.5 percent below pre-pandemic levels, according to the government.

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