Small and medium-sized firms retreat 4% in November in comparison with 2021
- December 31, 2022
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Despite the drop, IODE-PMEs shows growth of 1.9% compared to 2021 in the year
The average of the real financial movement of the small and medium-sized Brazilian companies fell again in comparison with the same period of the previous year, according to the Omie Index of Economic Performance of SMEs (IODE-PMEs). During 2022, declines in the index in the annual comparison were only verified between October and November, triggering a warning about a possible more prolonged loss of strength in the SME market in the country in the short term.
In November, the IODINE-SMEs shows that the average of the real financial movement of Brazilian SMEs decreased 4.0% compared to November 2021. In the direct comparison with October 2022, the index showed 2.5% growth. Even with the negative results in the last two months, in the accumulated result for the year up to November, the IODE-PMEs shows growth of 1.9% compared to the same period in 2021.
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 five major sectors: Agriculture, Commerce, Industry, Infrastructure and Services.
rise in interest
The effects of interest rate hikes in the country to control strong inflationary pressures influenced November results.
“The rise in interest rates makes it difficult to take credit for consumption and harms the evolution of investments in general. In addition, consumer confidence — measured by the ICC-FGV — retreated again in November (-3.3 points), reflecting the worsening expectations of agents for the coming months, which also attests to a more adverse scenario in the period for the evolution of household consumption”, says Felipe Beraldi, manager of Indicators and Economic Studies at Omie.
According to the IODE-PMEs sector openings, the negative result in November was driven by the weak performance of the sectors Commerce and Services — segments with the largest volume of companies in the Brazilian economy.
In commerce, the financial movement retracted 5.7% in November in the annual comparison, with falls verified in the wholesale and vehicle segments. On the other hand, even with the decline in the sector in general, retail grew again in November by 2.3%, given the positive effect of the sexta-feira Negra on some branches.
The average real financial turnover of SMEs in Services fell -5.0%. The weak results are concentrated in ‘Human health and social services’ and ‘Transport, storage and mail’, in addition to ‘Administrative activities and complementary services’ (such as ‘Office services and administrative support’ and ‘Selection and staffing constructions).
On the other hand, some Services activities registered a positive performance in the last month, as in the food industrywhich advanced 27.5%.
In general terms, while hosting the World Cup hampered the evolution of some B2B sectors, hosting the event has positive effects on some service segments, such as bars, restaurants and food supply for home consumption.
Contrary to the general result of the SME market, there are sectors that have shown growth in the recent period.
The main highlight was again the industry SMEs, in which real financial transactions increased by 1.3% in the annual comparison, with emphasis on ‘Printing and reproduction of recordings’ and ‘Preparation of leather and manufacture of leather goods, travel goods and footwear’. At infrastructure SMEs also presented a positive result of 3.4% in November, driven by the activities of ‘Provision of specialized services for construction’.