Brazil industry more confident

The Industry Confidence Index was up 4.2 points in June compared to May, reaching 83.4 points. Measured by Fundação Getúlio Vargas (FGV), the index improved in 14 of the 19 industries surveyed.

According to Aloisio Campelo Jr., Deputy Superintendent for Business Cycles at FGV/IBRE, the result suggests an improvement in business expectations, which has been observed since April. “The return of confidence to historical average levels depends, from now on, on an effective recovery of domestic demand and the reduction of uncertainties arising in the political environment,” he said.

The Expectations Index has also risen by 7.5 points, reaching 85.7 points in June. This was the largest monthly increase since January 2002 (7.6 points). It was driven by a decrease in the percentage of businesses that believed they should slow down production in the coming months from 28.7% in May to 16% in June. The percentage of businesses that increased production rose from 23.4% to 24.2%.

The Present Situation Index was up 2.7 points in June and now stands at 80.1 points. According to FGV, this result is related to a stabilization in the outlook for demand, which had been deteriorating steadily.

The Level of Capacity Utilization remained virtually stable in June. It was up 0.1 percentage point in May, to a total 73.9%. This has been the first improvement since the third quarter of 2013.

The FGV heard 1,114 businesses between June 1-23.

Translated by Mayra Borges