Confidence index grows in service sector
Valor Econômico
The Confidence Index of Services (ICS), issued by the Getulio Vargas Foundation (FGV), has again registered growth after three consecutive falls. The index went from 131.8 points in November 2010 to 132.2 points the last month of the year. The ICS was at 134.8 points in August 2010; it fell to 133.3 points in September; fell again in October, to 132.2 points; and stayed at 131.8 points in the last but one month of last year.
According to the Economist of the FGV, Silvio Sales, the result may result from the Christmas sales and Christmas Year-End Salary. "The increase causes reaction in the confidence of the entrepreneurs, which may be translating the moment of December, a time of strong economic activity". Despite the positive results, according to Sales, in the next verifications, the growth of the ICS should be lesser, in line with the pace of the economy as a whole, but not negative. "The level at which it ended in 2010 is high for the standard, and suggests continuity, but at a slower pace". According to the Economist, there are conditions for the country to sustain the high growth rates "without getting prepared to meet the demand."
Two of the seven sectors surveyed stood out in 2010: services rendered to companies (cleaning, legal, accounting, architecture and engineering activities, among others) and to households (food, lodging, recreational and cultural activities, personal services and education). The survey of the FGV has also showed the Index of the Current Situation rose from 121.9 points to 128.9 points between November and December and it reached its highest level in the historical series started in June 2008. The Index of Expectations, however, went from 141.8 points to 135.6 points, the lowest reading since June 2009, when it was at 130.2 points.
In a universe of 2,209 companies surveyed by the FGV, 34.5% consider the level of the current demand strong, a record percentage of the series, and 13.3% consider it weak. For the three months to come, 42.2% of those surveyed expect an increase in the demand and 11.9% expect otherwise. In November, such percentages corresponded to 47.7% and 8.2%.