The Industry Confidence Index (ICI), calculated by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV), rose 1.2 points in December, to 93.3 points, after three months of consecutive declines. In quarterly moving averages, the index retreated 2.1 points.
According to Ibre/FGV economist Stéfano Pacini, after three months of decline, industry confidence improved in December, but it was not enough to recover the losses suffered in the year. The researcher highlighted that part of the industry suffered from problems with inputs and another, with reduced demand, leading to an increase in inventories in 2022.
He added that the December result shows an improvement in the current situation influenced by a slight increase in demand and inventories. “Despite the one-off improvement, the confidence level remains low in all categories of use and in most segments. Regarding perceptions of the future, businessmen remain cautious regarding hiring possibly influenced by a scenario of economic slowdown and contractionary monetary policy”, said, in a note, Pacini.
In December, there was an increase in confidence in 11 of the 19 industrial segments monitored by the survey. The Current Situation Index (ISA) grew by two points, to 93.8 points. The Expectations Index (EI) accommodated itself by changing 0.2 points to 92.8 points.
According to the survey, among the items that make up the ISA, the indicator that measures the current business situation was the one that had the most influence, rising by 2.8 points to 92.5 points. According to Ibre/FGV, the result reflects a perception of a slight improvement in demand and a reduction in inventories in the period, with increases of 0.6 and 2.3 points, to 92.1 and 102.5 points, respectively.
Among the items that measure expectations, despite the increase in optimism in relation to production, there is a worsening of the employment scenario in the sector: the indicator that measures job prospects worsened for the fourth consecutive month, falling 4.2 points to 95.1 points, the lowest level since July 2020 (93 points). The indicator remains below 100 points, which signals a slowdown in hiring in the coming months.
The indicator that measures perspectives on production for the next three months rose three points to 94.1 points. “In the six-month horizon, the business trend rose 1.7 points to 89.5 points, but it does not recover the losses suffered in the previous month, remaining below 100 points since September 2021 (102.7 points)”, says the FGV.
According to the survey, the industry’s installed capacity utilization level dropped 0.2 points to 79.6%, the worst result since May 2021 (77.8%).
