ICEI® Business CONFIDENCE INDEX

ISSN 1676-2029 • Year 22 • Number 4 • April 2020

Business confidence declines to unprecedented levels

Historical seriesIndex (0-100 points)*

ICEI Historical average Dividing line

ICEIIndex (0-100 points)*

Confidence

Historical average

Lack ofconfidence

34.5points

53.7 pointsLack ofconfidence

Confidence

57.355.4

Apr/2034.5

30

40

50

60

70

Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 Jan/18 Jan/19 Jan/20

The Business Confidence Index (ICEI) dropped by 25.8 between March and April, hitting the mark of 34.5 points, the lowest figure in its historical series. Until now, the sharpest drop recorded in a single month had been one of 5.8 points in June 2018, in the wake of a truck drivers' strike. It is worth noting that the decline in the index in April followed a drop of 4.4 points in March and of 0.6 points in February. Between January and April, the ICEI retreated by 30.8 points.

This drop in confidence reflects the current scenario of a sharp decline in economic activity and high uncertainties due to the Covid-19 pandemic.

Difficulties are being faced in the flow of inputs, goods and workers, and the resulting “disappearance of consumers” was followed by a sharp drop in revenues. Routine expenses continue and, in this time of need, the availability of credit has declined significantly, and its cost has risen sharply. The fall in business confidence will contribute to stalling investments, that is, to deepening the economic crisis.

59.5

66.5

49.2

58.456.9

53.3

37.0

38.6

*Figures above 50 points indicate business confidence. The further above 50 points, the greater and more widespread is the confidence. Figures below 50 points indicatelack of business confidence. The further below 50 points, the greater and more widespread is the lack of confidence.

INDICATORSECONOMIC

ISSN 1676-2029 • Year 22 • Number 4 • April 2020

2

ICEI components

ICEI by geographic region North38.1points

Midwest37.6points

South32.6points

Southeast34.1points

Northeast34.2points

* Figures above 50 points indicate a better situation. Figures below 50points indicate a worse situation. The further from 50 points, the greaterand more widespread is the change.

Expectations IndexIndex (0-100 points)**

** Figures above 50 points indicate optimistic expectations. Figures below 50points indicate pessimistic expectations. The further from 50 points, the greaterand morea widespread is optimism or pessimism.

Index (0-100 points)*

ImprovementWorsening

69.464.1 62.0

53.3

43.3

41.4

56.859.5

62.7

Apr/2034 .7

20

30

40

50

60

70

Jan/10 Jan/12 Jan/14 Jan/16 Jan/18 Jan/20

OptimismPessimism

20

30

40

50

60

70

Jan/10 Jan/12 Jan/14 Jan/16 Jan/18 Jan/20

60.6

50.2

47.8 46.8 41.1

29.2 28.1

46.2

51.8

Apr/2034.1

49.9

Current Conditions Index Dividing line Expectations Index Dividing line

The fall in confidence is widespread among Brazil's geographic regions, but it is being felt more strongly by entrepreneurs in the South region, whose index fell by 34.6 points altogether between January and April. In the North region was recorded the lowest drop on the same basis of comparison, although still sharp, a 26.8 points decline.

So far, the decline in confidence is more related to uncertainties and negative expectations than to the economic slowdown. The Current Conditions Index dropped by 20.2 points to 34.1 points, while the Expectations Index fell by 28.6 points to 34.7 points.

ICEI® Business Confidence Index

Current Conditions Index

59.7

3

Technical specifications

2048 enterprises, including 828 small, 718 medium and 502 large companies.

Data collection periodApril 1-14, 2020.

Document closed by April 16, 2020.

Learn moreFor more information on the survey, including sectoral and regional results, previous editions, methodology and historical series, visit: www.cni.com.br/e_icei

Notes: 1 - ICEI and its components range from 0 to 100. Figures above 50 points indicate business confidence, better situation or optimistic expectations. Figures below 50points indicate lack of business confidence, worse situation or pessimistic expectations; 2 - As compared to the last six months; 3 - For the next six months.

Summary of results1

ICEI components APR19 MAR20 APR20

ICEI 58.4 60.3 34.5

Current conditions 2 in relation to: 49.9 54.3 34.1

Brazilian economy 49.4 53.8 30.7

Company 50.1 54.6 35.8

Expectations3 on: 62.7 63.3 34.7

Brazilian economy 60.7 60.9 29.9

Company 63.6 64.5 37.2

ICEI by industrial segment and size APR19 MAR20 APR20

ICEI 58.4 60.3 34.5

IndustrialSegments

Construction 56.4 59.3 34.8

Mining and quarrying 61.0 60.5 39.1

Manufacturing 58.8 60.6 34.3

BUSINESSSize

Small enterprises 56.9 60.1 34.9

Medium enterprises 58.4 60.0 34.9

Large enterprises 59.1 60.6 34.2

ICEI by industrial sectors

Mining and quarryingSECTOR APR20

39.1Construction 34.8

Infrastructure construction 34.9Construction of buildings 34.8Specialized services for the construction sector 33.1

Manufacturing 34.3Soap and detergents, cleaning preparations and others 42.9Pharmaceutical chemicals and pharmaceuticals 42.4Food products 40.5Repair and installation 38.4Wood products 37.6Chemicals (except Soap and detergents, cleaning preparations and others) 37.0Other manufacturing 36.1Metal products (except machinery and equipment) 36.0Biofuel 34.9Pulp and Paper 34.7Plastics products 34.3Leather and related products 34.1Electrical equipment 34.0Machinery and equipment 33.8Basic metals 33.4Beverages 33.2Non-metallic mineral products 33.1Rubber products 32.9Other transport equipment 32.6Printing and reproduction of recorded media 31.0Computers, electronics and optical products 31.0Motor vehicles, trailers and semi-trailers 30.8Textiles products 30.0Footwear and parts 29.4Wearing apparel 29.1Furniture 26.0

Lack of confidence is widespread amongindustrial sectors. Confidence indicator is lower among entrepreneurs in the Manufacturing(34.3 points) and Construction (34.8 points)industries than among those in the Miningand quarrying industry (39.1 points).

The sectors of manufacturing industry withthe highest confidence indicators include Soapand detergents, cleaning preparations andothers, Pharmaceutical chemicals andpharmaceuticals and Food, with 42.9 points,42.4 points, and 40.5 points, respectively.

Producers of consumer durables such asFurniture (26.0 points), Wearing apparel(29.1 points); Footwear and parts (29.4 points)and Textiles (30.0 points) are at the other extreme.

ICEI by industrial sectors

ICEI® - BUSINESS CONFIDENCE INDEX | English version of “ICEI - Índice de Confiança do Empresário Industrial, Abril 2020” | Monthly publication of the National Confederation of Industry - CNI | www.cni.com.br |Industrial Development Board - DDI | Analysis: Marcelo Azevedo | Research and Competitiveness - Unit - GPC | Executive manager: Renato da Fonseca | Statistics Unit | Manager: Edson Velloso | Team: Aretha Silícia Soares and Roxana Maria Rossy Campos | Editing Unit | Coordinator: Carla Gadelha | Graphic Design: Simone Broch.

Customer Service - Phone: +55 (61) 3317-9992 - email: sac@cni.com.brThis publication may be reproduced, provided that the source is mentioned.

ISSN 1676-2029 • Year 22 • Number 4 • April 2020ICEI® Business Confidence Index

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