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PPI Overview Shows High Perspectives for Small Industrial Enterprises, but Concerns About Tax Burden and Unfair Competition. Confidence Index on the Rise.
The small industry, characterized by employing between 20 and 99 workers, showed a significant recovery in its financial situation and performance stability in the last quarter of last year. These impactful results directly reflect on the outlook and confidence for 2024, surpassing historical averages. The information was revealed by the Industrial Entrepreneur Confidence Index, which was published this Monday (5).
The small industrial enterprises, also known as small-scale industries, are extremely important for the country’s economy. A solid financial situation and stable performance of these companies directly contribute to the growth and development of the industrial sector as a whole. Therefore, the recovery seen in the last quarter of last year is a positive sign not only for the small industries, but for the national economy as a whole.
Increase in Entrepreneur Confidence in the Small Industry
The survey by the National Confederation of Industry (CNI) revealed an increase of 0.7 points in the Industrial Entrepreneur Confidence Index (ICEI), reaching 51.2 points. This rise indicates growing confidence, reflecting positive expectations for the next six months.
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Favorable Perspectives for Small Industrial Enterprises
The Perspectives Index for small-scale industries rose 2.3 points, reaching 49.4 points in January 2023. This shows that entrepreneurs have more optimistic perspectives than usual for the period. This indicator takes into account the expectations of small industrial entrepreneurs regarding demand evolution, expected growth in the number of employees, and investment intentions.
Challenges Faced by the Small Transformation Industry
The heavy tax burden remains the main challenge for small transformation industries, with a rise in registrations from 38.8% to 41.6% in the last quarter of 2023. Unfair competition is also a major concern for these companies.
Insufficient domestic demand and unfair competition are other factors weighing on the transformation industry. In the construction industry, the tax burden has become the main problem, closely followed by the lack of skilled workers or high labor costs and high-interest rates.
Stable Financial Situation for Small Industrial Enterprises
The Financial Situation Index for small industries rose 0.8 points in the fourth quarter of 2023, reaching 42.2 points. This result indicates an improvement in the financial situation for small industries, keeping the index above the historical average of 38.4 points.
Overview of Small Industry: Indicators and Analyses
The Overview of Small Industry includes four main indicators: performance, financial situation, perspectives, and confidence index, all ranging from 0 to 100 points.
These indices take into account various factors, such as production volume, number of employees, utilization of installed capacity, satisfaction with operational profit, financial situation, ease of access to credit, expectations of demand evolution, and intentions for investment and hiring.
The survey is released quarterly based on the analysis of data from small industry collected in the Industrial Survey, the Construction Industry Survey, and the Industrial Entrepreneur Confidence Index (ICEI), interviewing around 900 entrepreneurs of small businesses.
Source: Industry Portal
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