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The industry confidence index, measured by the Getulio Vargas Foundation (FGV), decreased by 1 point from May to June. With the decline, the indicator reached 100.1 points, the lowest since January (99.4 points).
The decline in confidence hit entrepreneurs in 12 of the 19 industry segments in June. The current situation index, which measures confidence in the present moment, fell 5.5 points to 95.1 points, the lowest level since September 2017 (90.8).
The expectations index, which measures confidence compared to the coming months, increased by 3.4 points, or 105 points, the highest level since May 2013 (105.4).
According to the FGV, the truckers' strike increased inventories of end products and reduced inventories of inputs, affecting costs, production, capacity utilization and confidence of businessmen.
Decline in Confidence
Also according to the FGV, the deterioration of the level of stocks was decisive for the fall in confidence in the month. The percentage of companies with excessive inventories rose from 7.9% to 12.8% between May and June – the worst since April 2017 (12.9%). The proportion of companies with insufficient stocks rose from 3.9% to 4.5%, returning to the same level as in April 2018.
The best expectations in terms of hiring and production have also influenced the rise in expectations in June. The indicator of the evolution of people with jobs over the next three months rose by 6.2 points to stand at 107.3 points, the highest level since June 2011 (108.8); and the forecast production indicator for the next three months rose 5.8 points to 108.0 points, the highest since May 2013 (108.1).
The level of utilization of installed capacity fell to 76.2% in June, 0.3 pp lower than May's result. This is the first reduction of the level since September 2017.
Edition: Kleber Sampaio
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