Confidence in services does not sustain recovery and falls to 94.8 points in April

The Services Confidence Index (ICS) fell 1.0 points in April, to 94.8 points, not sustaining the increase observed in March, when it had advanced 1.6 points, the Getúlio Foundation reported this Monday (29). Vargas (FGV). In quarterly moving averages, the index changed -0.3 points.

Stéfano Pacini, economist at FGV/Ibre, commented in a note that the second quarter began with a worsening of confidence in services and that the April result maintains the perception of the sector’s loss of steam over the current situation over the last few months.

“The negative results in relation to the future occur heterogeneously between the segments and begin to show signs that the services sector is not likely to see a strong recovery in the first half of the year”, he predicted.

According to the economist, the macroeconomic scenario of maintaining a fall in interest rates, controlling inflation and better results in employment and income, could represent a positive path to recovering confidence in the sector, which has been facing difficulties at the beginning of the year.

The fall in the ICS this month resulted both from worsening assessments of the current situation and expectations for the coming months. The Expectations Index (IE-S) fell 1.6 points, to 94.4 points.

The Current Situation Index (ISA-S) fell 0.5 points, to 95.4 points, the lowest level since May 2023 (92.3 points). This result was influenced both by the current demand volume indicator, which dropped 0.6 points, to 95.4 points, and by the current business situation indicator, which dropped 0.4 points, to 95.3 points.

Both indicators that make up the IE-S fell, with the business trend indicator over the next six months having the greatest weight in the fall, with a drop of 2.5 points, and reaching 94.5 points, while the demand indicator forecast for the next three months fell 0.4 points, to 94.5 points.