Brazilian industry confidence fell to 92,0 points in February, the lowest level since July 2020, according to FGV/Ibre.
A drop in confidence was recorded in 8 of the 19 industrial segments surveyed; inventories are at a high level.
Infomoney - The Industry Confidence Index (ICI) fell 1,1 points in February, to 92,0 points, the lowest level since July 2020 (89,8 points). In three-month moving averages, the index remains stable at 92,8 points, after falling for five consecutive months. The data was released this Monday (27) by FGV/Ibre.
According to Stéfano Pacini, an economist at FGV/Ibre, the decline in the month reflected greater caution among business owners regarding the future of their businesses, but the result was heterogeneous, with more favorable prospects for the non-durable goods category. In February, a drop in confidence was recorded in 8 of the 19 industrial segments surveyed by the Survey.
"Despite a slight improvement in domestic demand, the results show an increase in inventory levels. Future prospects are becoming more pessimistic again, with business owners projecting a drop in production and hiring for the first half of the year. The scenario still seems undefined for the industry, with mixed signals across different segments," he commented.
The result reflects an adjustment in assessments of the current situation and a worsening of expectations. The Current Situation Index (ISA) fell 0,3 points to 92,8 points, while the Expectations Index (IE) dropped 1,8 points to 91,4 points, the lowest level since July 2020 (90,5 points).
Among the components of the ISA, the indicator measuring inventory levels had the most negative influence, falling 3,6 points to 106,6 points. When this indicator is above 100 points, it signals that the industry is operating with excessive (or above desirable) inventory levels.
Conversely, business owners' perception of the current situation rose 2,0 points to 92,9 points, which seems related to a slight improvement in demand, which advanced by a smaller magnitude, 0,9 points to 92,8 points.
Regarding expectations for the coming months, business leaders project a worsening of business trends over the next six months. The indicator fell 2,5 points to 89,4 points, remaining below the neutral level since September 2021 (102,7 points).
In the shorter-term horizon of three months, employment prospects fell 0,8 points to 94,8 points, reaching their lowest level since July 2020 (93 points). Furthermore, the indicator remains below 100 points, still signaling a slowdown in hiring in the coming months.
Meanwhile, the indicator that measures prospects for production over the next three months fell 2,0 points to 90,5 points, the worst result since March 2022.
The Industrial Capacity Utilization Level remained relatively stable and fell -0,1 percentage point to 78,7%, the worst result since May 2021 (77,8%).