Due to the effects of the coronavirus pandemic, trade confidence plummets in March according to FGV. It is the biggest drop since the beginning of the research.
According to the release of the Getúlio Vargas Foundation (FGV) this Wednesday (25), the Commerce confidence index fell 11.7 points in March compared to February, remaining at 88.1 points.
This drop is already a result of the effects of the coronavirus and was the biggest since the beginning of the research in 2010. The lowest value had been in August 2017 when the level reached 85.6 points.
“The drop in trade confidence in March is a first sign of the impact of the coronavirus pandemic on the sector. The sharp drop was due to the review of expectations by businessmen, who are concerned about the direction of business in the coming months”. Rodolpho Tobler, Coordinator of the Trade Survey at FGV IBRE, examined in a note.
Expectation index plummets
The expectations index, one of the components of the indicator. It had a drop of 24.3 points. The index was influenced by damaged expectations regarding sales and the trend of business in the coming months in all the different segments. Mainly in the sector of trade in vehicles, furniture and household appliances.
On the other hand, the Current Situation Index registered a slight improvement in relation to certain segments, such as hyper and supermarkets and pharmaceutical items. "In the short term, the expectation is still a reduction in the pace of sales, especially in this period when there is a need to close shops and isolate consumers," said Tobler.
quarterly result
In the last quarters of 2019, the index showed positive results, but confidence fell in the first quarter of 2020. The decline in expectations began before the coronavirus pandemic, which intensified it even further.
“Beyond expectations, the ISA-COM also fell again after two quarters of increases, showing that even before the coronavirus, the sector was already at a slow pace of recovery”, pointed out the FGV coordinator.
