Service Trust records second high consecutive

The service confidence index rose 2.2 points in July, to 93.4 points, registering the second high consecutive, according to Fundação Getulio Vargas (FGV). "After four consecutive falls at the beginning of 2019, service sector confidence seems to signal a trend reversal. The improvement for the second month of current situation indicators and also expectations suggests that entrepreneurs are realizing a reaction in the pace of activity in the sector and becoming more optimistic for the second semester. Despite the good results, the level still low in historical terms shows that there is still a path to be traveled and that the resumption of the sector must follow in the gradual rhythm ", analyzes Rodolpho Tobler, economist at FGV IBRE. The positive result in July impacted 9 of the 13 activities surveyed. The two components had positive variations: current situation index advanced 1.9 point, to 89.4 points, while the index of expectations rose 2.6 points, to 97.6 points. The reversal of the downward trend was more influenced by the more intense improvement of expectations. However, FGV points out that there are still obstacles to a more robust recovery. The limiting factors to the business improvement of companies still remain at high levels, due to insufficient demand, which returned to rise in July and is at 34.4%, higher percentage since August 2018 (35.0%). The assessment of entrepreneurs on insufficient demand, which had been decreasing since October 2018, reversed in May and went back up. In this way, it is necessary to wait if the perception of the current situation will continue to evolve favorably in the coming months.