Business Confidence Index falls 0.6 points in March to 94 points, lowest level since November
04/02/2025
The impact of rising interest rates drove the decline of the Business Confidence Index (ICE) in March. The index fell by 0.6 points last month to 94 points, its lowest level since November 2023, due to a sharp drop in the retail sector, where the cost of installment payments significantly affected sales.
Compiled from the confidence levels of the four sectors covered by the business surveys conducted by the Fundação Getulio Vargas’s Brazilian Institute of Economics (Ibre-FGV), the ICE was dragged down by a 2.4-point fall in retail confidence, which dropped to 83.1 points. The other sectors—industry, construction, and services—all posted gains in March. Industry confidence increased by 0.1 points to 98.4 points; services rose 1.2 points to 92.9 points, and construction increased 0.7 points to 95.0 points.
“I see a sharper decline in retail goods that hinge on credit. Interest rates are likely starting to take effect,” said Aloisio Campelo, a researcher at Ibre-FGV overseeing the ICE survey.
The economist added that high interest rates are also making consumers more cautious, especially amid high household debt. Mr. Campelo noted that sales of durable and semi-durable goods posted the weakest performances in March. “Food wasn’t behind the weak retail performance in March,” he claimed.
Mr. Campelo said that despite the March drop and the steep decline in retail, the overall ICE reading for the month “is not all bad.” He acknowledged negative aspects, such as the index’s third consecutive monthly decline, but pointed out that recent ICE downturns have largely concentrated in retail and services. On the positive side, he highlighted the resilience of the industrial and construction sectors.
“Short-term indicators show that industrial activity remains resilient. Confidence in construction declined, but there’s a limit to how far it can fall given government programs targeting the sector,” Mr. Campelo argued.
Among the components of the overall index, the ICE decline in March was driven by worsening expectations. The Expectations Index (IE) fell 1.4 points from February to 91.5 points, while the Current Situation Index (ISA) edged up 0.3 points to 96.5 points.
It was the fifth straight decline for the IE. The sharpest drop was in expected demand over the next three months, which fell 1.9 points to 91.4 points. Expectations for business conditions six months ahead declined 0.9 points to 91.8 points.
*By Rafael Rosas — Rio de Janeiro
Source: Valor International