The Business Confidence Index (ICE) dropped by 2.1 points in January compared to December 2022, to 88.6 points, informed this Wednesday (1st) the Getulio Vargas Foundation (FGV).
It is the lowest level for the indicator since March 2021, when it stood at 85.9 points. In quarterly moving averages, the indicator fell by 3.2 points in the month.
For the FGV, the drop in composite confidence of the different business sectors “reflects the continuation of the trend of deceleration in economic activity that started in the fourth quarter of 2022 and the little optimistic expectations for the evolution of the economy in the short term”.
“The worsening of the business environment is widespread across sectors, but is perceived more sharply in the Commerce and Services segments. With regard to the future, expectations continue to deteriorate in the three-month horizon but have shown signs of improvement in forecasts for the next six months”, says a note released by the entity.
The ICE brings together the confidence indicators produced by the FGV’s Industry, Services, Commerce and Construction surveys.
The calculation takes into account the weights proportional to the participation in the economy of the investigated sectors, based on information extracted from the annual structural surveys of the Brazilian Institute of Geography and Statistics (IBGE).
According to the FGV, the objective is for the ICE to allow a more consistent assessment of the pace of economic activity.
Like other FGV confidence indicators, the ICE is made up of two main components.
In January, the negative performance of the aggregated indicator was mainly determined by the worsening of evaluations on the current business situation, since the Business Current Situation Index (ISA-E) dropped by 4.3 points, to 90.9 points.
The Expectations Index (EI-E), in turn, lost 1.9 points, to 86.0 points. although it dropped less, it reached the lowest level since March 2021, when it stood at 85.2 points.
The aggregated data for January point to a spreading decline in business confidence. Confidence retreated in all sectors that make up the ICE.
In addition, business confidence rose in 41% of the 49 segments surveyed by ICE, a spread lower than that observed in the previous month, of 53%.
The ICE collection gathered information from 3,926 companies from the four sectors between January 1st and 27th, 2023.
Source: CNN Brasil
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