Monetary common of small and medium-sized corporations retreats in October, reveals IODE-PMEs

IODE-PMEs indicates that the financial average of Brazilian SMEs decreased by 3.9% compared to September and 1.7% compared to October last year

The Omie Index of Economic Performance of Small and Medium Enterprises (IODE-PMEs) points out that the financial movement of SMEs Brazilian companies started the fourth quarter of 2022 in a smaller proportion in the annual comparison – the first negative result of the year. Despite the deceleration seen during the third quarter, the IODE-PMEs had still remained at levels higher than those observed in the same period of the previous year.

In October, IODE-PMEs indicates that the financial average of Brazilian SMEs retreated 1.7% compared to the same period of the previous year. In comparison with September 2022, the index points to a decrease of 3.9%. Even with the negative result in the last month, the accumulated result for the year brings a growth of 2.6% compared to the same period in 2021.

“Despite the drop in inflation and the improvement in the labor market, the interest rate (SELIC) and the indebtedness of families are hampering the evolution of SMEs. In fact, consumer confidence – measured by the ICC-FGV – dropped 0.4 points in October, after four months of consecutive increases, reflecting the worsening expectations of agents for the coming months”, says Felipe Beraldi, manager of Indicators and Economic Studies by Omie, management platform (ERP) in the cloud.

Sectors

The market’s negative result in October was driven, especially, by the poor performance of the sectors Commerce and Services – segments with the largest volume of companies in the Brazilian economy.

At the Business, real financial transactions in the sector dropped by 8.9% in October in the annual comparison, with declines seen both in wholesale and retail. Even with negative results, some retail segments maintained growth, such as:

• fabrics and clothing
• home appliances
• audio and video equipment
• furniture

The index points out that it is still too early to assume whether the fall in the last month is configured as a trend for the Commerce sector.

“The result for the month calls attention since Commerce had been standing out positively in the SME market in recent months”, says Beraldi.

The financial movement of small and medium-sized companies in services presented a decrease of 1.1% compared to October 2021. In this sector, the IODE-PMEs have already shown consecutive declines since June. Among the activities, the weak results are concentrated in human health and social services and transport, storage and mail. Poor performance is also observed in education.

Contrary to the general result, there are areas that showed growth. The movement of Industry increased 8.9% in the annual comparison in October, with emphasis on the furniture, machinery and equipment segments. SMEs from Infrastructure also grew +1.4% in the annual comparison.

Source: Exam