The Omie Economic Performance Index of SMEs (IODE-SMEs) revealed a 13% growth in the average financial turnover of small and medium-sized Brazilian companies in July 2024, compared to the same period of the previous year. Year-to-date, the index shows an increase of 5.6% compared to the same period in 2023. This growth was observed widely across major sectors of the economy, with particular emphasis on Industry and Commerce.
Sector Performance:
- Commerce: The Commerce sector recorded a 19.4% increase in revenue in July, reversing the 11.8% decline observed in the same period of 2023. The growth was driven by wholesale (+24.2% YoY) and the recovery of retail SMEs (+9.1%).
- Industry: SMEs in the Industry sector showed a 18.5% revenue progress, maintaining the positive trend observed throughout the year. The performance was supported by activities such as ‘Printing and reproduction of recorded media’, ‘Manufacture of furniture’, ‘Manufacture of pulp, paper, and paper products’, and ‘Manufacture of machinery and equipment’.
- Services: The Services sector showed good performance in July (+6.2% YoY), after a 1.7% decline in the previous month. The growth was driven by segments like ‘Delivery activities’, ‘Veterinary activities’, ‘Advertising and market research’, and ‘Lodging and food service’.
- Infrastructure: SMEs in the Infrastructure sector recorded a growth of 8.6% in July, after two consecutive months of decline. The segments of ‘Specialized services for construction’ and ‘Collection, treatment, and disposal of waste’ were the main contributors to the positive performance.
Felipe Beraldi, economist and Manager of Economic Indicators and Studies at Omie, explained that part of the growth is due to the ‘calendar effect,’ as July 2024 had 23 working days, compared to 21 in the same month of 2023. ‘For various segments of the SME market, this results in a more robust monthly revenue, making the comparison unbalanced,’ Beraldi commented.
For a more precise analysis, the average daily movement of accounts receivable from SMEs was considered, indicating an expansion of 3.2% compared to the same period of the previous year, although in a more restrained manner than the comparison between complete months measured by IODE-SMEs.
Beraldi highlighted that the market’s heating can be attributed to domestic economic fundamentals, such as the strength of the labor market, with unemployment below 7% and an increase in real average worker income, supporting consumption. In addition, the loosening of monetary policy, with the Selic decreasing since August of last year, also contributed to the positive result.
‘The growth in SMEs’ revenue at the beginning of the third quarter confirms the outlook for maintaining sector growth throughout the second half of 2024,’ concluded Beraldi.
The IODE-SMEs, which functions as an economic thermometer for companies with annual revenues of up to R$50 million, is divided into 701 economic activities within the Commerce, Industry, Infrastructure, and Services sectors, offering a comprehensive and detailed view of SMEs’ performance in Brazil.
