Brazil industrial confidence surges to highest in almost 8 years -survey

Credit: REUTERS/© Roosevelt Cassio / Reuters

BRASILIA, Sept 21 (Reuters) - Brazilian industrial confidence jumped in September to its highest in almost eight years, a survey showed on Monday, underscoring the sector's strong rebound from the coronavirus lockdown and divergence from the services side of the economy.

The Fundacao Getulio Vargas's national industrial confidence index for September rose to a seasonally adjusted 105.9 from 98.7 in August, according to preliminary figures, the index's highest reading since January 2013.

"The rise in confidence is due to both business's positive outlook for the current situation and optimism for the coming months," FGV said.

As the FGV chart shows, confidence has recovered all the record ground lost earlier this year as the pandemic brought industrial activity across the country to a virtual standstill, and it has continued to rise.

Capacity utilization rose 2.7 percentage points to 78.0%, the survey showed, higher than the pre-crisis level of 76.2% in February and the highest since March 2015, FGV said.

Despite the recovery, Brazilian industry is still on course for one of its worst years on record. The central bank expects industrial production this year to shrink 8.5%, although that could be revised in its Quarterly Inflation Report later this week.

Unlike industry and manufacturing, Brazil's services sector, which accounts for around 70% of all economic activity, is still contracting and shedding jobs, the latest indicators and surveys show.

Brazil industrial confidence

(Reporting by Jamie McGeever; Editing by Steve Orlofsky)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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