The year 2025 will be challenging for small and medium-sized enterprises, according to the Omie Index of Economic Performance of SMEs (IODE-SMEs). The survey indicates that the turnover of small and medium-sized Brazilian companies (SMEs) experienced a 1 decline,2% in the first quarter of this year, compared to the same period in 2024. Regarding the fourth quarter of 2024, the fall was even greater (-1,5%)
This performance represents the worst result of the indicator since the last quarter of 2021, reflecting the loss of breath in certain segments of Services, beyond the contraction in SMEs in the industrial and infrastructure sectors
Figure 1: IODE-PMEs
(Index number – base: average 2023=100
Source: IODE-PMEs (Omie)
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
For Felipe Beraldi, economist and manager of Indicators and Economic Studies at Omie, cloud management platform (ERP), o IODE-PMEs já indicava uma perda significativa de dinamismo no mercado das PMEs a partir de meados do quarto trimestre de 2024, amid the deterioration of the domestic macroeconomic scenario. Despite the continued growth of real labour earnings — principal componente del ingreso de las familias brasileñas —, the increase in fiscal uncertainties regarding the coming years has pressured inflation expectations and driven up interest rates, comprometendo o poder de compra das famílias, explain
In the external scenario, the environment has also become more hostile, facing uncertainties related to the US tariff policy under the Trump administration and the responses adopted by other major economies, with emphasis on China
A fact that reinforces this outlook of greater difficulties for the development of SME businesses was the sharp decline in consumer confidence between December 2024 and February 2025 (-7,6% in the period, as pointed out by the Consumer Survey of FGV-IBRE. This decline reflected, overcoat, a deterioração das expectativas dos agentes económicos
In the same direction, the latest edition (March) of the Omie Small Business Survey, strengthen this outlook of deterioration in small entrepreneurs' expectations regarding the domestic economic environment. The survey shows that entrepreneurs are more pessimistic, com 51% indicando perspectiva de deterioração da economia, greater number than the 39% of the survey conducted in September 2024. In light of this context, the decline of IODE-PMEs in the first quarter of 2025 reinforces the perception that this will be a more challenging year for the Brazilian economy, comment the economist
Despite setbacks in various sectors at the beginning of the year, Trade remained in positive territory, according to the index. PMEs registraram crescimento de 7,9% in the actual average turnover in the first quarter of 2025, compared to the same period in 2024. However, the disaggregated analysis shows quite different performances between wholesale and retail
The wholesale trade SMEs showed a significant growth of 10,2% in this first quarter, driving overall market performance. Wholesale trade of beverages, Comércio por grosso de resinas e elastómeros e Comércio por grosso de resíduos de papel e cartão foram as atividades com maior destaque.
Already in retail, após sinais de recuperação ao longo do segundo semestre de 2024, as PMEs voltaram a registar uma modesta queda de 1,3% in this first quarter. Retail of veterinary medicines, Retail of office equipment and retail of books were the activities that continued to show positive performance during the period
Figure 2: IODE-PMEs – sector openings
(1T2025 x 1T2024)
Source: IODE-PMEs (Omie)
The Services sector is the largest market for SMEs in terms of the number of companies. In the segment, the IODE-PMEs indicates stability in average turnover, with variation of -0,2% compared to the same period of the previous year. З одного боку, the sector has been negatively impacted by the weakening of activities that stood out in 2024, Nutrition, Professional activities, científicas e técnicas e Serviços pessoais. On the other hand, the sector had good figures in the 1st quarter due to the growth of 'Information and communication' activities, Transport and Storage and Financial Activities
The results of retail SMEs and some segments of the Services sector highlight the recent impact of increased inflationary pressures and the decline in economic agents' confidence, factors that have reduced household consumption momentum. Furthermore, the scenario of rising interest rates in the country has especially harmed the most capital-intensive activities, como demonstram os resultados do IODE-PMEs nos setores de Indústria e Infraestrutura
In the Industry, there has been a shortness of breath since the second half of 2024, with the recession intensifying in the first months of 2025. In the first quarter of this year, the sector recorded a decrease of 5,8% and the contraction among industrial SMEs is widespread across the activities monitored by the index. Dos 23 subsectores da indústria de transformação acompanhados pelo IODE-PME, 15 showed negative performance. Even so, there are activities that demonstrated resilience and continued to grow during the period, with emphasis on: ‘Printing and reproduction of recordings’, Manufacture of wood products and manufacture of metal products
In the Infrastructure segment, the SMEs have resumed declining, with a 3-point retracement,3% in this first quarter, after the positive performance recorded in the fourth quarter of 2024 (+9,7% Year-on-Year. The negative result affects activities such as 'Infrastructure Works', Construction of buildings and even specialised services for construction. On the other hand, the maintenance of growth in 'Water' activities, sewer, gestão de resíduos e descontaminação contribuiu para conter uma queda ainda mais acentuada do setor como um todo nos últimos meses
Finally, the IODE-PMEs also allows regional analysis of the behavior of Brazilian SMEs. No primeiro trimestre de 2025, the index reveals that the SME market remained in positive territory in the Southeast regions (+0,6% YoY) and, especially, Central-West (+2,5% ano a ano. On the other hand, was registered, on average, a contraction in the Southern regions (-3,5% ano a ano, Northeast (-3,5% YoY) and North (-10,4% ano a ano, que reforça a heterogeneidade do mercado entre as diferentes regiões do país
According to Beraldi, even with major macroeconomic challenges on the radar, the basic scenario for the Brazilian economy does not suggest a complete halt to growth. In general terms, the recent IODE-PME results reinforce the expectation that the SME sector will grow more in line with the overall projections for the Brazilian GDP with the median of forecasts currently around 2%, according to the Central Bank's Focus Bulletin. This scenario is different from the past years, quando o mercado de PME cresceu a um ritmo mais acelerado do que a economia como um todo, evaluate
