RIO DE JANEIRO, BRAZIL – The National Confederation of Commerce of Goods, Services and Tourism’s (CNC) index of business confidence (Icec) rose 12.2% in June compared to May, reaching a high of 47.6% compared to June 2020.
According to the company, it was the first month-on-month increase in the indicator in the year, driven by the prospects of improvement in the economy, and increased sales in the industry due to transactions related to “Dia dos Namorados” (Sweethearts’ Day) on June 12.
In June, all three components used to calculate the indicator showed an increase, both relative to May of this year and relative to June 2020, in current conditions, with increases of 19.3% and 71.8%, respectively, in these two comparisons; expectations, with increases of 11.6% and 53.9%, relative to May and June of last year, respectively; and Investment Intentions, with increases of 8% and 26.5%, respectively, in these comparison periods.
In the communication on the performance of the indicator, CNC advises that, in practice, there is currently a better general assessment of economic activity. It recalls its own projection of a 3.9% increase in retail sales in 2021, based on retail statistics already published in April by the Brazilian Institute of Geography and Statistics (IBGE).
CNC also raised its estimate of gross domestic product (GDP) growth for this year to 3.8% from 3.2%, in line with the market’s reassessments of the economy’s progress for this year, the company pointed out in a report on the indicator.
Also in the note on the June indicator, the president of CNC, José Roberto Tadros, said that in addition to the positive impact of Sweetheart’s Day, there is already a slowdown movement of restrictive measures of social movement amid the pandemic, which increases confidence in the sector he noted.
However, Tadros commented that the continuity in the growth of optimism depends directly on the progress of immunization in the country. “There is also the complementarity of factors such as the Pandemic emergency aid, which has ‘relieved’ families,” he added, referring to the aid paid by the government, amid the economic crisis caused by the Covid-19.
In the June indicator, it can be noted that small businesses in the retail sector were the most optimistic, added Antonio Everton, economist in charge of the survey. According to him, smaller companies (up to 50 employees) contributed more to the improvement of Icec this month.