Brazil Confidence in Micro and Small Business Unmoved by Elections

By Jay Forte, Contributing Reporter

RIO DE JANEIRO, BRAZIL – A recent survey showed the confidence index of micro and small entrepreneurs stood at 51.0 points in September from 51.1 points in August, which indicated that the elections have not changed the view of the entrepreneurs, according to a report by Agencia Brasil yesterday (October 8th).

The survey was conducted by the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brazil), the General Conditions Indicator, which evaluates the perception of the last months, and the Expectations Indicator, which projects a future horizon of six months.

“The data shows that most small business owners are optimistic about the future, but are still on hold. Some macroeconomic indicators show signs of improvement, but electoral disputes always generate uncertainty. This means that confidence does not start, but also does not go back to the heights of the crisis,” said CNDL (National Confederation of Shopkeepers) president José Cesar da Costa.

The survey also indicates that for 53 percent of micro and small entrepreneurs, the economy has worsened in the last six months. Those who noticed improvement in this period were 17 percent. When they look at the performance of their business, 24 percent have evaluated that their company has advanced, and 36 percent say that it has worsened.

The drop in sales was the main reason for this worsening among 77 percent of respondents. The increase in prices of raw materials and products was cited by thirty percent, and ten percent said they have felt the consequences of their customers defaulting.

Among those who saw improvement in their micro or small business, 61 percent said they had sold more in the period, and 23 percent attributed to an improvement in the management of the company.

According to the survey, at least 57 percent of entrepreneurs said they were confident about the future of their business, of which 29 percent attributed this to good business management and 27 percent did not know the reason for their optimism. On the other side, the pessimists are eleven percent.

When questioned about the outlook for the economy, 36 percent are confident, but of these, 47 percent do not know the reasons. Another 21 percent bet on the consumer market and 21 percent expect a more favorable political scenario. Pessimists reach 24 percent, mainly because of political uncertainties (65.6 percent).

Wilson Hsu, an American expatriate from Los Angeles whose family runs a florist shop in Rio’s SAARA (Centro), the Festamania Presentes Ltda, shared for his business, “Actually business has gotten better in the last few weeks and I really don’t know why … everything was looking doom and gloom and all of a sudden sign of relief out of nowhere. But not sure if it’s just short term or not, or if it will continue on till Christmas.”

Hsu was not sure it had anything to do with the elections though. “I think for small businesses things won’t change all that much that fast … Not even the best president can change things that quick.”