Industry confidence drops in November and goes to its lowest level since August 2020, says FGV

In November, industrial confidence in Brazil dropped for the fourth month in a row and reached its lowest level since mid-2020, given the worsening of both the current scenario and future prospects, according to data from the Getulio Vargas Foundation (FGV).

The FGV informed this Friday (26) that its Industry Confidence Index (ICI) presented a decline of 3.1 points in the month and was 102.1 points, the lowest level since August 2020 (98.7 points).

“The confidence of November signals a change in the trajectory of recovery of the industry in a disseminated way, with 15 of the 19 segments showing a drop in confidence”, highlighted FGV IBRE economist Claudia Perdigão, in a note.

“The retraction in confidence occurs at a time when inflation is advancing, reducing consumers’ purchasing capacity, while unemployment remains high. Added to these points are cost shocks and logistical bottlenecks. As a result, the sector may end 2021 with falling optimism,” he added.

According to the FGV, the Current Situation Index (ISA), which measures the sentiment of entrepreneurs about the present moment in the industrial sector, dropped 4.6 points to 103.7 points, the lowest value since August 2020 (97.8 spots).

The Expectations Index (IE), an indicator of the perception of the coming months, dropped 1.6 points to 100.3 points, the lowest level since May this year (99 points).

The most recent data from the IBGE show that the Brazilian industry ended the third quarter with losses of 1.7% over the second, after a 0.4% decline in production in September.