Trade confidence falls to the lowest level since 2021 and raises alert for hiring

Brazilian trade ended October with the weakest mood since 2021. According to a CNC survey released on Thursday (29), the Icec, the entity's confidence index, fell 2.7% in the month, to 96.7 points. It was the fourth monthly drop in a row and the most intense since July, according to Gazeta do Povo.

At 96.7 points, the indicator was at its lowest level since May 2021, when it reached 94.5 points. The decline comes at a time when the sector needs to reinforce teams for Black Friday and Christmas, the most profitable period for commerce. Even so, the intention to hire fell 2.8% in October, which raises a warning about employment in the segment.

Investments also lost steam. The investment sub-index fell 2.4%, to 98.9 points. Among businesspeople, investment in their own companies fell 2.7% compared to September and 4.4% year-on-year, and investment intentions fell 1.8% compared to October 2025. José Roberto Tadros, president of the CNC-Sesc-Senac System, stated that the drop in hiring and investments slows down the economy and called for predictability and better conditions for business.

The perception of the current moment is even harsher. The current economic conditions index fell 5.5% in October, to 68.2 points, and has accumulated six consecutive months of decline. According to the survey, 78.2% of businesspeople perceived a worsening of the economy, the greatest pessimism since May 2021. The evaluation of the sector itself fell by 6.1% in the month, and that of companies' conditions, by 4.5%.

The section by segment shows where the pressure is greatest. Semi-durable goods, such as clothing, footwear, fabrics and accessories, saw a 5.4% drop in confidence in the month and 3.3% in one year. Fabio Bentes, chief economist at CNC, attributes part of the problem to imported goods, which began to put pressure on national traders after the end of the so-called Blouse tax. He also pointed to consumer debt as an obstacle to the recovery of sales.

What is at stake is the speed of retail recovery in the coming months. The research does not provide sales projections, but the message is clear: without predictability, commerce tends to postpone hiring and investment decisions, and this effect can affect companies' results.

What changes for the investor

For those who follow the stock market, interest rates and the dollar, the data works as a thermometer of domestic activity. Companies linked to retail and consumer goods are the most exposed to falling confidence, and the points of attention highlighted by the CNC, such as competition from imported goods and household debt, help explain the caution. A confidence reading does not alone define the direction of a stock or a currency, but it reinforces the need to observe the quality of demand and the predictability of the business environment before making decisions. The research does not provide price projections or indicate what to buy or sell. What it shows is a sector in caution, and performance at the end of the year will be the next test.

Automatically translated from Portuguese.