Industrial sentiment deteriorates further as concerns over global tensions and potential U.S. tariffs weigh on expectations
Brazilian manufacturers grew even more pessimistic this month as current business conditions and expectations for the next six months continued to deteriorate. According to the National Confederation of Industry (CNI), its Industrial Entrepreneur Confidence Index fell from 46.7 points in June to 44.4 in July, the lowest reading since June 2020, during the Covid-19 pandemic.
The index has remained below the 50-point threshold—which separates optimism from pessimism—for 19 consecutive months. According to the CNI, that is the second-longest stretch of pessimism on record, surpassed only by the 2015–16 recession.
“When pessimism persists for such a long period, it tends to translate into fewer jobs, lower production and even the cancellation of productive investment,” Marcelo Azevedo, the CNI’s economic analysis manager, said.
The Current Conditions Index fell 0.7 point to 41.6 in July, moving even further below the neutral 50-point mark. Manufacturers said both business conditions and the broader economy are worse than they were six months ago.
Meanwhile, the Expectations Index dropped 3.1 points to 45.8, its steepest decline since November 2022, when it fell 10.8 points. The latest reading indicates weakening confidence in companies’ own prospects and growing pessimism about the economy.
“The deterioration in expectations is likely linked to growing uncertainty over the external environment, including the escalation of the conflict in the Middle East earlier this month and the possible return of U.S. tariffs on Brazilian products,” Azevedo said.
*By Valor — São Paulo
Source: Valor International
https://valorinternational.globo.com/