Itaú BBA - Industry confidence slightly increases in December

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Industry confidence slightly increases in December

December 27, 2018

Soft industry confidence in December glooms the meaningful confidence recovery from other sectors

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According to FGV’s monthly industry survey, business confidence in the industrial sector slightly increased to 94.8 in December (0.5% higher than the previous month). The result came 0.3pp above the preview released a week ago. The breakdown shows a 1.9% increase in current conditions and a 0.7% decline in expectations. Yesterday, commerce confidence was also released, and came in at 105.1 points in December (from 99.4 in November), the highest level since April 2013. The breakdown shows increases in both current conditions (+4.4%) and expectations (+6.6%). Construction confidence was also published, and reached 85.5 points in December (from 84.7 in November), driven by a rise in current conditions and expectations (both up 0.8%).

Supermarket real sales improved 1.4% mom/sa in November (our seasonal adjustment), according to ABRAS. In year-over-year terms, supermarket sales advanced 3.0%. Our preliminary forecast for November’s monthly survey of commerce (to be released on January 13th) is a 0.4% mom/sa gain in core retail sales and  a 0.2% increase in the broad segment (which includes vehicle and construction material). 

Day ahead: The figures on the central government budget balance relative to November will be released, for which we expect a BRL 12.6 bn primary deficit. Also, the central bank credit report of November will be published during the day.


Day ahead: The INDEC will publish the EMAE (official monthly GDP proxy) for October, for which we expect activity to post a drop of 0.9% mom/sa from September, leading to a 5.9% yoy contraction. The institute will also release the current account balance for 3Q18. We expect to see a decrease in the current account deficit in 3Q18 to USD 6.0 billion (USD 8.3 billion in the same quarter one year before) as a consequence of a weaker peso and lower internal demand. 


Day ahead: the institute of statistics will release the unemployment rate for November, which we expect to come in at 9.7% (9.6% one year before), leading to 10.1% unemployment in the quarter (9.9% as one year before).

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