Brazilian Consumers Still More Confident Than Business

In spite of signs of weakness in the Brazilian economy in the last two years, Brazilian consumer confidence kept increasing up through  April of this year. The main measure of Consumer Confidence, the Getulio Vargas Foundation (FVG) Index reached an all time high of 128.7 points  (The index has a range of 1 to 200 points with 100 points considered an indication of neutral sentiment.)  in April of this year.  Confidence has since weakened and in June was some 4% below the peak.  Appraisals of current conditions that had reached 148.1 points in April are still relatively high.  The June index was 139.1 points or almost 40% above what is considered  "neutral sentiment."  Expectations have been more subdued.  As can be seen in the first chart that shows consumer confidence, current conditions and expectations, the index of expectations has generally been below levels reached before the financial crisis of 2008.

Brazilian businessmen, in general, have been less optimistic than consumers, particularly in their appraisal of current conditions.  The measure of business confidence is different from that of the consumer.  (Business confidence is measured by a ba balance of opinion measure where values above 50 equal growth and those below 50 represent retrenchment.  While consumers still rate current conditions highly, the business community shows current conditions is a state of retrenchment. But while consumers recent expectations tended to be below those reached before the financial crisis of 2008, business expectation have been higher, as can be seen in comparing the first and second charts. 

The consumer confidence data were published today and the business data late last week and can be found in the Haver Database, EMERGELA.

Brazil Jun '12 May '12 Apr '12 Mar '12 Feb '12 Jan '12 Consumer Confidence Index  (Points) 123.5 127.1 128.7 122.7 119.4 116.0 Current Conditions  (Points) 139.1 145.5 148.1 142.7 140.5 137.4 Expectations  (Points) 114.9 117.0 118.7 112.2 108.3 104.9 Business Confidence Index  (50%+ =Growth) 56.1 57.9 57.2 58.6 59.2 57.3 Current Conditions (50%+ =Growth) 46.9 48.6 47.7 49.0 49.4 48.5 Expectations (50%+ =Growth) 60.6 62.6 62.0 63.4 62.7 61.7