Trade confidence in Brazil took the 2nd biggest historical plunge in April

Almost half (49%) of the trade businessmen show an intention to reduce their investments and cut workforce

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In April, 35.5% of trade businessmen in Brazil said they intended to reduce the number of employees. Photo: Shutterstock
  • The confidence of the Brazilian retail entrepreneur is down 5.3% in the monthly ticket, the second consecutive;
  • This month, 35.5% of trade businessmen said they intended to reduce the number of employees.

The confidence of the Brazilian commerce entrepreneur, calculated by the Brazilian National Confederation of Trade in Goods, Services and Tourism (CNC), reached 120.7 points in April, down 5.3% from March, and a second consecutive drop. The accumulated plummet of 7.8 points in the Commerce Entrepreneurs Confidence Index (Icec) is also the second largest in the historical series of the indicator, according to Valor.

The pessimistic perception of the current level of economic activity is explained by the spread of the coronavirus, which, since the decree of the world pandemic, in the second week of March, has imposed the adoption of measures to help economic agents and to fight against pandemic.

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Since then, the proportion of entrepreneurs who perceive the current economic conditions as worse than a year ago (44.8%) has also increased, and almost all of them want to reduce their investments.

In relation to April of last year, the Icec dropped 3.6%. Despite less optimistic traders, confidence remains above 100 points in all regions, still in a positive evaluation. This context, however, may be reversed in the next few months, reported CNC.

According to the media outlet, retailers expectations for the short term were affected by the impacts of the crisis. From February to March the index started a sharp fall. Regarding investment intentions, the Trade Entrepreneur Investment Index also recorded a negative monthly variation, -3.2%, reaching 103.3 points, the lowest level since August 2019. In relation to March of the year In the past, the index showed stability.

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This month, 35.5% of trade businessmen said they intended to reduce the number of employees, compared to 30.9% in March and 29.7% in April 2019.

This index is a leading indicator found among decision makers in retail companies, whose objective is to detect trends in the sector’s business actions. The sample is composed of approximately 6,000 companies located in all Brazilian capitals.

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