The Omie Index of Economic Performance of SMEs (IODE-SMEs) indicates that the revenue of small and medium enterprises (SMEs) in the South region increased by 8,4% in the year-on-year comparison. The advancement of the sector at the national level was 4,5% in 2024. In the fourth quarter, the index showed an increase of 3,3% compared to the same period last year
Besides the South region, the IODE-PMEs signals that market growth was driven, mainly, for the good performance of the Northeast (+8,3%) and Southeast (+3,7% before 2023. The SMEs in the Central-West region (+0,1% remained stagnant, and from the North (-10,4%) retracted
The index data indicates performance superior to the country's overall GDP in the last year. According to the Focus Bulletin from the BCB, a mediana das perspectivas de mercado para o PIB de 2024 (cujo fechamento oficial ocorrerá em março/25) se encontra no patamar de 3,5%
The IODE-PMEs functions as an economic thermometer for companies with annual revenues of up to R$50 million, consisting of the monitoring of 736 economic activities that make up four major sectors: Trade, Industry, Infrastructure and Services
Figure 1: IODE-SMEs
(Index number – base: average 2023=100
Sources: IODE-PMEs (Omie)
The performance of the national market, according to Felipe Beraldi, economist and manager of Indicators and Economic Studies at Omie, was conditioned by the increase in domestic demand and indicates a loss of momentum in the segment, especially in the Industry and Services sectors. "In recent years", there was a strong increase in real disposable income for families, in a context of fiscal expansion with income transfer programs and payment of court orders. The support of a heated job market should also be taken into account, unemployment close to the reduced historical level of 6% of the last decade and real earnings on the rise and already higher compared to the pre-pandemic period, explain
Figure 2: IODE-PMEs – sector openings
(2024 x 2023)
Sources: IODE-PMEs (Omie)
Business
The main contributor to the improvement of the SME market in 2024 was Commerce, with an advance of 8,1% compared to the previous year. The economist recalls that companies in this sector began a recovery trajectory starting from the second quarter of the previous year, after a quite challenging 2023, reflecting the context of consumption growth in the country. In 2024, the results were positive for wholesale (+9,0% YoY) and for retail (+6,4% YoY, with emphasis on 'Food', 'Drinks' and 'Hygiene products', house cleaning and maintenance
Already in retail, the signs of recovery became more consistent for SMEs in the second half of 2024, highlighted by the sustained growth of Commerce over the past six months. Among the activities with the best performance, are 'Office equipment', Food products, 'Pharmaceutical products with formula manipulation' and 'Hydraulic and electrical materials'
Services
Another sector of the small and medium enterprises market that began to expand in the previous year was Services, with an increment of 2,5%, even with the slowdown in the last months of the year (+1,2% in 4Q2024. "The increase also impacted the job market", with most of the increase in the balance of formal workers concentrated in activities in the Services sector throughout 2024, reinforces the economist. "Financial and insurance activities" stand out, Transport and storage, 'Human health and social services' and 'Information and communication'
Industry
Industrial SMEs slowed down in the second half, with a retraction of 1,5% YoY in Q4 2024. Even so, the sector closed 2024 with revenue 2,2% higher compared to 2023, according to the IODE-PMEs
In this context, the advancement of the sector has been less widespread among the different activities of the industry in recent months. Of the 23 subsectors monitored by the index, only 11 showed an increase in the fourth quarter of 2024 compared to the previous year. They are: 'Printing and reproduction of recordings', Transport equipment, Maintenance, repair and installation of machines and equipment and Machines, electrical devices and materials
Infrastructure
Small and medium-sized infrastructure companies ended the last year with an increase of 0,8% before 2023.After a first semester of declines, the area began to show expansion again starting in August
Beraldi adds the influence of the municipal election period on the sector. "If on one hand", dynamizes some activities, on the other, high interest rates tend to inhibit the development of the construction industry. With that, the expansion of Infrastructure was driven by 'Collection, waste treatment and disposal, "Electricity" and "Specialized services for construction", comment. Already segments of the construction industry, as 'Infrastructure works' and 'Building construction', reported lower revenue
SMEs are expected to grow in 2025, but at a more moderate pace
The perspectives, based on the IODE-PMEs, indicate growth of 2,4% in 2025, after an average advance of 6,9% per year in the 2023-24 biennium. According to the economist, despite the macroeconomic challenges and the increase in uncertainties in the domestic economy, there are elements that should support the continuity of the evolution of the Brazilian economy this year, even with some slowdown
In general, this continuity is supported by a context of sustaining family income – unemployment at a reduced level of 6,1% and with no clear signs of reversal. Such context tends, so, to favor some market segments more sensitive to income, such as Services and some segments of Retail (food products, hygiene articles, pharmaceutical products, etc.)
On the other hand, the high inflation expectations in the country and the increase in the basic interest rate by the Central Bank in recent months should restrict the momentum of consumption and investments, with reflections on SMEs, especially from the second quarter of this year. With that, there will be, in 2025, challenges for the performance of segments more dependent on the evolution of credit, as industrial activities, commercial and in civil construction
The business environment this year is expected to be highly susceptible to shocks in national and international scenarios. Internally, there is the addressing of fiscal issues (balance between government revenues and expenditures), in addition to the approval of the Tax Reform, which will take effect from 2026, but it is recommended that entrepreneurs estimate the impacts of changes as soon as possible, orient Beraldi. "Already in the external scope", in addition to monitoring geopolitical tensions around the world, monitoring the political and economic evolution of the US at the beginning of Trump's administration is quite relevant, in light of the significant impacts on the evolution of the economies of developing countries, like Brazil, complement
