Invoicing of small and medium-sized firms loses steam in July, exhibits Iode-SMEs

Invoicing of small and medium-sized firms loses steam in July, exhibits Iode-SMEs

In July 2022, SME revenue increased by 0.7% compared to the same period of the previous year

After an accumulated growth of 3.5% in the first half of the year, the small and medium enterprises Brazilian SMEs signal a slowdown in real financial transactions, indicates the Omie Index of Economic Performance of SMEs (Iode-SMEs).

In July 2022, the index shows that the revenue of SMEs in the country showed a slight expansion of 0.7% compared to the same period of the previous year. In direct comparison with June 2022, there was growth of 1.1%.

The Iode-PMEs works as an economic thermometer for companies with annual revenues of up to R$ 50 million, consisting of monitoring 637 economic activities that make up the five major sectors:

  • agricultural
  • Business
  • Industry
  • Infrastructure
  • services

According to Omie’s manager of economic indicators and studies, Felipe Beraldi, the recent performance of Iode-SMEs configures a slowdown in the SME market compared to the one observed in the first five months of 2022.

“The business environment marked by pressured inflation and high interest rates harms the evolution of consumption and investments, which is directly reflected in the evolution of small and medium-sized Brazilian companies”, he evaluates.

segments

services

According to the sectoral openings of the Iode-SMEs, the recent slowdown in the market has been conditioned, especially, by the retraction observed in the sector of services — segment that concentrates the largest share of active CNPJs in the country, according to information from Sebrae.

According to the index data, in July/22, there was a 4.5% retraction in real financial transactions in the services sector compared to the same period of the previous year, configuring the second month of decline in this comparison basis. Among the eleven subsegments that make up the sector, six show a decline in the last month, with a negative emphasis on ‘real estate activities’ and ‘professional, scientific and technical activities’.

Infrastructure

In addition to the retraction observed in the services sector, weaker results have also been observed recently in the Infrastructure sector, in which real financial transactions in July showed a modest retraction of 0.3% in the annual comparison.

industry and agriculture

On the other hand, the Industry and Agriculture sectors continued to show good performance in the recent period, with advances of 6.4% and 19%, respectively, compared to the results of July 2021. financial performance of SMEs in July indicates good performance, especially in businesses linked to the following activities according to Beraldi:

  • Preparation of hides and manufacture of leather goods
  • Travel items and footwear
  • Manufacture of non-metallic mineral products

Business

Finally, the real financial movement in commerce continued with a positive performance in the last month, but the loss of breath of the sector has become increasingly evident.

The commerce sector also has an important share in the market for small and medium-sized Brazilian companies. According to information from Sebrae, among the approximately 6.3 million active CNPJs of micro and small businesses, 38% are concentrated in commerce.

As observed in the services sector, the SME-Iode signals a certain loss of breath in the performance of commercial SMEs’ activity in recent months, in relation to the performance observed since the last quarter of 2021.

Analysis

“The data corroborate the current moment of the Brazilian economy. Despite the optimism brought about by the greater control of the covid-19 health crisis, the conditions for consumption this year are much more adverse, with emphasis on the intense interest rate hike promoted by the Central Bank in recent months. The rise in interest rates has a direct effect on the real economy, by harming the taking of credit and hindering the evolution of the population’s consumption”, analyzes the Omie specialist.

Despite this environment, short-term expectations still signal support for SME activity in commerce. In addition to the lower inflationary pressure observed recently (especially due to the drop in fuel prices), the government’s new fiscal measures to support consumption, amidst the difficulties observed in the global economic environment, should allow the maintenance of the activity of SMEs in commerce in next months.

“Although such measures have controversial effects on public finances, the short-term results on the financial movement of SMEs tend to be positive, as they open up space for consumption beyond what is essential in the household budget”, concludes Beraldi.

Source: Exam

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