Industrial confidence in Brazil sees rise after three-month slump
The National Confederation of Industry’s (CNI) Industrial Business Confidence Index (Icei) reveals increased confidence among industrial entrepreneurs in June, especially in anticipation of the coming six months.
The Icei rose by 1.2 points, reaching 50.4 points this month.
The index surpasses the 50-point threshold, distinguishing industrial sector confidence from a lack of confidence.
A total of 1,382 companies participated in the survey conducted between June 1 and 7.
This uplift in confidence breaks a three-month chain of dwindling confidence in the industry that spanned from March to May 2023.
The Icei oscillates around the 50-point threshold throughout the year, signifying wavering confidence among businesses.
Marcelo Azevedo, CNI’s economic analysis manager, noted that while entrepreneurs’ views on Brazil’s economy’s current state are negative, expectations have gradually improved throughout the year.
Azevedo explains, “Industrial activity has been greatly affected by high-interest rates, but that is only one of the many elements impacting business confidence. High default rates and household debt levels also play a significant role.”
The CNI’s survey indicates all Icei components improved from May to June 2023. The Current Conditions Index saw a rise of 1.1 points, landing at 44.2 points.
Despite this increase, entrepreneurs continue to perceive a decline in current business conditions compared to the previous six months.
However, this negative perception is less intense and widespread than in May.
The Expectations Index increased by 1.3 points to 53.5, signifying increased optimism for the industry in the second half of the year.
However, this optimism is limited to the company level.
The company expectation index rose by 1.1 points to 56.8 points, whereas the Brazilian economy expectation index rose by 1.9 points but remained below the threshold at 47 points.
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