Brazil’s industrial confidence gauge recorded its largest one-month decline in a year in August, as cooling demand and rising stockpiles weighed on sentiment, the Getulio Vargas Foundation (FGV) reported on Thursday.
The Índice de Confiança da Indústria (ICI) dropped 3.5 points from July to 93.7, the lowest level since December 2024. The decline was broad-based, with the current conditions index (ISA) falling 5.0 points to 94.9—its lowest since December 2025—and the expectations index (IE) slipping 2.0 points to 92.6, the weakest since November 2025.
The softening reflects weaker demand across industrial sectors and a renewed build-up of inventories, FGV economist Stéfano Pacini said. Sectors tied to capital goods and durable consumer goods have shown some resilience due to targeted sectoral policies, but remain sensitive to monetary conditions, he added.
Pacini noted that the outlook points to a general deceleration in economic activity, compounded by rising uncertainty ahead of the upcoming elections. Despite stable labor market conditions and ongoing sectoral stimulus measures, elevated interest rates and persistent inflationary pressures continue to weigh on confidence, he said.
