Household Consumption Intention grows for the fifth month

Traders’ optimism improves in May, says CNC

Traders were more optimistic in May. The Business Entrepreneurs’ Confidence Index (Icec), calculated by the National Confederation of Commerce in Goods, Services and Tourism (CNC), reached 120.2 points, after the volume of retail sales showed consecutive and surprising increases. This is the highest level since December 2021. The indicator reached the level with an increase of 5.7% in the monthly passage. In comparison with May 2021, the advance is even greater: 31.6%.Traders' optimism improves in May, says CNC

According to CNC, when it reached 102.2 points, the indicator for traders’ assessment of current conditions returned to the favorable zone. It is the highest level since April 2020. There was also a positive result in the Expectations of the Entrepreneur of Commerce index, which with a percentage of 3.7% had the first high after four consecutive months of decline.

For the president of CNC, José Roberto Tadros, the data indicate that traders expect a more favorable second semester given the current context. “The positive variations, between January and March, in the volume of sales, with more people circulating in the stores, and the growth of the Family Consumption Intention, despite inflation and high interest rates, improved the perception of entrepreneurs about current conditions. ”, he stated.

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According to CNC, despite wholesale prices still compressing margins and, thus, altering the dynamics of trade replenishment, the perception of the level of inventories, in the Investment Intentions indicator recorded the best score since April 2020. CNC economist responsible for the research, Izis Ferreira, understood that this movement demonstrates that commerce felt, in May, it was easier to replace products on the shelves than a year ago, when the country was still overcoming the second wave of the covid-19 pandemic. .

According to CNC, the improvement in the confidence of small companies was another positive factor in the indicator. The optimism of large retailers grew 10.2% in the year ended in May, but in small businesses it grew 32%. “The normalization of the flow of consumers in the stores until April encouraged small shopkeepers, since the modality of sale in physical outlets is mostly responsible for the billing of these companies”, showed the assessment of the entity.

According to Izis Ferreira, in view of this scenario, CNC revised upward its sales growth projection in 2022 and estimates an advance of 1.5%. “It is expected that measures to support income and consumption, such as extraordinary FGTS withdrawals and the anticipation of INSS benefits, will have more concentrated effects on consumption and debt payment in the second half of the year”, he analyzed.

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