Trade Confidence Index Up 3.2 Points in August

RIO DE JANEIRO, BRAZIL – The Trade Confidence Index, measured by the Getulio Vargas Foundation (FGV), rose 3.2 points in August to 98.7 points from 95.5 in July. Compared to August 2018, the increase was 4.5 points. The data were released Friday, August 24th.

August recorded the third consecutive positive result, pushing the quarterly movable rate up 2.4 points, after five consecutive declines. According to Rodolpho Tobler, FGV-IBRE’s Trade Survey Coordinator, the increase reflects the improved perception of entrepreneurs of the pace of sales. However, confidence has not yet fully recovered.

“Despite this, it was insufficient to exceed the level of late last year. The result suggests continued recovery in the sector, at a slow pace, but slightly better than that recorded in the first half of the year. More expressive improvements still depend on a more consistent recovery in the labor market and consumer confidence”.

The month recorded a high in ten of the thirteen segments surveyed by IBRE. There was a significant improvement in the Current Situation Index (ISA-COM), which rose 7.1 points, from 88.6 to 95.7, the highest figure since December 2018, when the index stood at 97.4 points. The Expectations Index fell slightly by 0.8 points in August, after two highs, and recorded 101.8 points.

The ISA-COM result is also reflected in the Extended Retail Discomfort Indicator, an index comprising factors such as insufficient demand, access to bank credit and financial cost, which showed the fourth consecutive drop in quarterly movable rates.

The trend shows that entrepreneurs have found fewer limitations in the business environment. Despite the improvement, the indicator remains high, at 109.5 points, standing above 100 points since April 2014, when the index was 99.7 points.