Services Confidence Index drops to 99.1 points in October, says FGV/Ibre

The Services Confidence Index (ICS) dropped 2.6 points in October, to 99.1 points, the lowest level since June, when it reached 98.7 points, informed this morning the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV/ Ibre). In quarterly moving averages, the index retreated 0.6 point.

According to Rodolpho Tobler, economist at FGV/Ibre, confidence in services has returned to below 100 points, after three months above the level considered neutral. “The drop is due to both a worsening of the valuations about the moment, but which still remains within the limit of normality, as well as expectations”, he said. O

For him, the sector seems to be starting to show signs of slowing down, projecting a reduction in demand in the coming months, mainly in professional and information and communication services, and in the future trend of business. “The next few months should be crucial to confirm the direction of the entire sector considering the challenging macroeconomic scenario and the expectation of a weaker economy at the turn of 2023”, he evaluated..

The fall in the ICS this month was influenced both by the worsening of companies’ assessment of the current situation and by the worsening of expectations in the coming months. The Current Situation Index (ISA-CST) dropped 1.8 points, to 100.0 points. After seven straight months of highs, the Expectations Index (EI-S) dropped 3.5 points to 98.2 points.


The fall in confidence in the month of August was not uniform among the segments, according to FGV. The segment of services provided to families, for example, again gave positive signals about trust and reached the highest level since 2011.

On the other hand, the aggregation of the other service segments fell once again, opening the gap between these two indices. For Tobler, the services provided to families may still have a pent-up demand.

OECD lowers global economic growth forecast to 3.1% in 2022 and 2.2% in 2023
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