The resurgence of growth in Brazil continues to have impacts in industry and services, with two indicators released on Tuesday (31) by the Getulio Vargas Foundation (FGV) pointing to a consistent recovery in both sector. The Industry Confidence Index (ICI) gained 2.6 points in October to 95.4, the highest since April 2014. The Services Confidence Index (ICS), in turn, rose 2.2 points to 87.8, the highest level for October in the last three years.

In industry, confidence was up in 10 of the 19 segments surveyed. The main result was the Current Scenario Index (ISA), which went up 4.9 points to 95.5 in 14 of the 19 segments. The Expectations Index (IE), in turn, rose by 0.3 points (to 95.2) in 7 of the 19 segments.

As for services, the good result was driven by increased confidence in 9 of the 13 activities surveyed. There have been improvements in both the current scenario and future expectations indicators. The ISA for services (ISA-S) went up by 2.3 points, while the Expectation Index (IE-S) increased 2.1 points.

“The rise in the confidence indicator of the services sector in October was driven by good prospects across all segments. The more favourable results of the business environment affected evaluations of both current and future prospects, as well as aspects such as the impetus for employment and the level of utilisation of installed capacity," says Silvio Sales, a consultant at FGV IBRE.

Employment

Employment prospects in the sector for the coming months are also positive. The Employment Trend Indicator broke the 100-point mark in October for the first time in 34 months. The result, 101.3 points, indicates that the share of companies planning to hire people (16.5%) is now higher than those who are planning to cut positions (14.5%).

According to the FGV, entrepreneurs now have a more favourable reading of the business environment. The widespread pattern of improvement in corporate perceptions, the foundation said, "is likely to be sustained in the coming months, barring the occurrence of some shock-driving development coming from the political field”.