After the increases seen in December and January, the Business Entrepreneurs’ Confidence Index (Icec) dropped 1.2% in February, although it still remains in the confidence zone, with 119.3 points. The data were released today (16) by the National Confederation of Trade in Goods, Services and Tourism (CNC).
According to CNC, the rate almost eliminated January’s 1.4% growth. Year-to-date, the increase is 0.2%. In the same two-month period last year, there was a decrease of 2.7%. The seasonally adjusted Icec remained in the satisfaction zone for the eighth month in a row and equaled the level of September last year.
The three components of the indicator and the nine subfactors fell in February, pessimism last seen in April 2021, when the Icec recorded a negative rate of 6.4%, given the uncertainty and restrictions imposed by the covid-19 pandemic. , with the index falling to 95.7 points. Throughout 2021, there were fluctuations in the index, with an upward trend following the vaccination of the population against covid-19 and the reopening of trade.
The pessimism in the month was influenced by the increase in electricity and fuel; the adjustment of rents; pressure on wholesale prices; difficulties in passing on costs; lukewarm consumption and indebted households; recovering labor market; rising interest rates and inflation.
“Under these conditions, estimates today are for a low volume of retail sales in 2022. In another sense, promisingly, there are prospects for a cooling of inflation, as monetary policy has been generating desired effects on the economy, in particular on the performance of the commerce and the formation of prices to the consumer”, explains the CNC.
The biggest drop among the components of Icec occurred in the business expectations of merchants, with a reduction of 1.6%, impacted by the negative perception of the conjuncture about the company (1.9%). The indicator of the current conditions of the entrepreneur fell by 1.4%, reaching 100.4 points. Among the subfactors, economic conditions had the greatest variation, with a drop of 2.4%.
Regionally, pessimism was widespread across the country. “Traders in the South region showed the greatest drop in confidence (1.7%), while in the North the index decreased the least (0.5%)”, points out the CNC.
By size of companies, the smaller ones stood at 119.2 points, with a confidence level below the larger ones, which hit 124.6 points. The sub-indicator of the current conditions of the commercial entrepreneur (Icaec) was indifferent, because of the smaller companies (100.3 points), while the medium and large ones were confident in a higher level, at 107.8 points.
By category of use, durable goods companies had a 2.7% drop in confidence, due to higher interest rates. The semi-durable and non-durable segments dropped 0.3%. As a result, the Icaec of non-durables was 100.4 points, that of semi-durables reached 107.7 and that of non-durables was 100.4 points.
Investment intentions fell by 0.9%, with a decrease in confidence in implementing investment expenditures in the company, which fell by 1.9%.
The inventories sub-indicator dropped 0.1% to 88.9 points, due to difficulties in calibrating the level of product with demand. Personnel hiring intentions fell by 0.4%, reflecting expectations for the coming months of the economy.
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