Confidence of small business owners in Minas Gerais fell in May, closing at 114 points, seven points lower than those registered in April. According to the Sabre Small Business Confidence Index (ISKCON) survey, entrepreneurs’ current moment assessment of their activities and medium-term expectations both deteriorated. The survey surveyed 1,001 participants between May 4 and 13.
The Recent Situation Index (SRI), which measures entrepreneurs’ perception of their activities over the past three months, fell by four points (from 85 to 81). The Expected Situation Index (ISE), which reflects entrepreneurs’ expectations for the following quarter, stood at 131 points, eight less than the one registered in April.
Since ISE has a dual weighting in the ISKCON structure, deterioration of business expectations in the short term helps to explain the decline of the index in May. “The effects of higher inflation and higher interest rates should affect the economy in the next semester and may exacerbate this negative impact on entrepreneurs’ confidence”, evaluates Sebre Minas analyst Paola La Guardia.
Analysts also confirm that, during the first quarter of this year, although Brazil’s gross domestic product (GDP) grew, productive investment declined by 3.5%, affecting growth over the long term. “Low investment, low efficiency, productivity and innovation”, says Paola.
