The Omie Index of Economic Performance of SMEs (IODE-SMEs) revealed a 13% increase in the average financial movement of small and medium-sized enterprises (SMEs) in Brazil in July 2024, compared to the same period last year. In the year-to-date, the index shows an increase of 5.6% compared to the same period in 2023. This growth was observed in a widespread manner across the major sectors of the economy, with emphasis on Industry and Commerce.
Sector Performance:
- Business: 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: The SMEs in the Industry showed an 18.5% increase in revenue, maintaining the positive trend observed throughout the year. The performance was supported by activities such as 'Recording and reproduction of recordings', 'Furniture manufacturing', 'Pulp, paper, and paper product manufacturing', and 'Machinery and equipment manufacturing'.
- 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 such as 'Delivery activities', 'Veterinary activities', 'Advertising and market research', and 'Accommodation and food services'.
- Infrastructure: Small and medium-sized enterprises in the Infrastructure sector recorded an 8.6% growth in July, after two consecutive months of decline. The segments of 'Specialized construction services' and 'Waste collection, treatment, and disposal' were the main contributors to the positive performance.
Felipe Beraldi, economist and manager of Indicators and Economic Studies at Omie, explained that part of the growth is due to the "calendar effect," since July 2024 had 23 business 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," commented Beraldi.
For a more precise analysis, the average daily movement of accounts receivable of SMEs was considered, which showed an expansion of 3.2% in relation to the same period of the previous year, although in a more contained manner than the comparison between complete months measured by IODE-PMEs.
Beraldi highlighted that the market heating can be attributed to domestic economic fundamentals, such as the robustness of the labor market, with unemployment below 7% and an increase in workers' average real income, supporting consumption. Furthermore, the easing of monetary policy, with the Selic rate falling 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 prospect of continued growth in the sector throughout the second half of 2024,” concluded Beraldi.
IODE-PMEs, 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 the performance of SMEs in Brazil.
