São Paulo’s Micro and Small Industries Interrupted Downward Trajectory in 2019

RIO DE JANEIRO, BRAZIL – The São Paulo Micro and Small Industry Activity Indicator, released on Friday, January 17th, shows that the sector experienced a year of stability in 2019. The survey, based on the entrepreneurs’ assessment of the business, was commissioned from the Data Folha Institute by the Micro and Small Industry Syndicate (SIMPI).

The satisfaction index closed the year at 108 points, the best result since 2014 when it scored 112 points. “Despite the improvement in the index this year, offsetting the previous years’ losses has not yet been possible,” said SIMPI.

As for employment in small-sized industries, the indicator closed last year with 99 points, pushed up by 103 points due to year-end hiring. When the index is above 100 points, it means that the balance of jobs is positive, with more hiring than layoffs. Below 100 points, the balance is negative.

The annual average has been negative since 2014, with the worst result in 2016, when it stood at 85 points.

A significant portion (45 percent) of micro and small-sized industries closed December with insufficient working capital. As a result, 21 percent of entrepreneurs used the overdraft facility (a type of credit that has one of the highest interest rates in the market) to sustain their activities, while six percent had to resort to personal loans.

For SIMPI’s president, Joseph Couri, unless the scenario improves in 2020, small-sized industries will accumulate five years of losses. “The balance for 2019 points to the magnitude of the challenges to be overcome and surmounted in 2020, otherwise we will have five consecutive years lost,” he said.