Micro and small confidence stays secure in relation to September, however larger than in October 2021
The confidence of the owners of micro and small companies suffered a slight drop in the last month of October, but – despite this – it remains stable and higher than that registered in the same period of last year. According to the survey “Survey of Micro and Small Companies”, carried out by Sebrae and Fundação Getulio Vargas (FGV), the Confidence Index of MSE had a decrease of 0.8 points, reaching 99.6 points. This drop was mainly caused by the loss verified in the Expectation Index of MSE (2.5 points), reaching the level of 96.7 points, which moves away from the neutrality zone. The items that make up the Expectation Index became more pessimistic, with emphasis on the business trend, which fell by 3.9 points (going to 96.1 points), while forecasted business demand fell by 3.9 points (closing in 94 points).
The MSE Confidence Index is the result of the composition of the indices of the three main sectors of the economy: Commerce, Services and Manufacturing Industry. The deterioration in confidence in October was mitigated by the Manufacturing Industry, whose indicator rose by 0.8 points. The Trade and Services sectors dropped by 2.7 points and 2.1 points, respectively.
“The confidence of micro and small companies was directly influenced, in October, by the Trade and Services sectors, while the Manufacturing Industry cushioned the fall a little. The perception of deterioration, albeit modestly, is greater at this time for commerce and service companies, but all sectors project a worsening in future prospects, considering the challenging economic scenario forecast for 2023, with a restrictive monetary policy, inflation above the target and a slowdown in the international economy”, evaluates the president of Sebrae, Carlos Melles.
After two consecutive months of increases, the confidence of owners of micro and small companies in the Commerce sector retreated 2.7 points in October (beating 98.1 points), leaving the neutrality zone. Even with consumer incentive policies and the recovery of the labor market, which contribute to greater consumption of goods, this month’s result may be linked to the uncertainties that the country is experiencing and to a scenario of expectation of a slowdown in the economy to the next year. The Trade Confidence Index (ICOM) fell even more sharply, by 3.8 points, reaching 98 points, which shows that, regardless of the size of the company, the reduction in demand has affected the sector as a whole.
The confidence of micro and small companies in the Services sector dropped 2.1 points, dropping to 99.4 points, the lowest level since April 2022 (97.8 points). This drop was determined both by the current moment and by the short-term perspectives. The Service Sector MSE Current Situation Index (ISA-S-MPE) had the most negative influence, dropping 2.4 points to 100.6 points, but still remaining above the neutrality zone.
After three months of consecutive declines, the confidence of micro and small companies in the Manufacturing Industry sector (MSE-Industry) showed a slight increase in October: 0.8 points, reaching 97 points, continuing below the neutrality level.
The positive result of the industry’s MSEs is mainly due to an improvement in the evaluations about the moment. The Current Situation Index for Manufacturing Industry MSEs (ISA-I-MPE) rose to 95.6 points, a total of 2.9 points, but it was still not enough to offset the accumulated loss of the last three months. The item that most contributed to the result was the level of inventories, which means that there was a decrease in the proportion of companies that claim to have excessive inventories at the moment.
Source: Sebrae Agency