The confidence of businesspeople in Brazilian industry reached, in July, the lowest level since the height of the covid-19 pandemic. The Industrial Business Confidence Index (Icei) fell 2.3 points compared to June, from 46.7 to 44.4 points, according to a survey released this Monday (13) by the National Confederation of Industry (CNI).
Industry confidence falls to lowest level since the pandemic
The confidence of businesspeople in Brazilian industry reached, in July, the lowest level since the height of the covid-19 pandemic. The Industrial Business Confidence Index (Icei) fell 2.3 points compared to June, from...
As a result, the indicator has remained below the 50-point line for 19 consecutive months, which separates confidence from lack of confidence. This is the second longest sequence of pessimism in the historical series, behind only the period of economic recession between 2015 and 2016.
Prolonged pessimism
According to the entity's Economic Analysis manager, Marcelo Azevedo, the persistence of pessimism tends to reduce the pace of production, slow down investments and affect the job market.
"As there is such a long period of pessimism, this translates into a reduction in the number of employees, production or even the cancellation of productive investments," said Azevedo in a note.
Lower expectations
The two components that make up Icei recorded a drop in July.
The Current Conditions Index fell 0.7 points, to 41.6 points, indicating that businesspeople assess that the business environment and the economy are worse than they were six months ago.
The Expectations Index fell 3.1 points, to 45.8 points, registering the biggest decline since November 2022. As a result, optimism regarding the companies themselves lost strength, while the perception about the Brazilian economy became even more negative.
External scenario
According to the CNI, the deterioration in expectations is linked to increased uncertainty in the international scenario.
Among the factors highlighted are the worsening of conflicts in the Middle East and the possibility of resuming tariffs imposed by the United States on Brazilian products, factors that have increased the perception of risk among businesspeople.
"The worsening of expectations is possibly due to the increase in uncertainty in the external scenario, both the intensification of the war in the Middle East and also the possible resumption of American tariffs on Brazilian products", assessed Marcelo Azevedo.
How it works
The Icei varies from zero to 100 points. Results below 50 indicate a lack of confidence among industrial entrepreneurs, while indices above this level signal confidence.
For the July edition, the CNI interviewed 1,118 companies between the 1st and 7th of July, 442 of which were small, 411 were medium-sized and 265 were large.
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Source: Noticias ao Minuto - Ultima Hora
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