The revenue of small and medium enterprises (SMEs) showed an increase of 8,6% in the third quarter of 2024 compared to the annual comparison, according to the Omie Index of Economic Performance of SMEs (IODE-SMEs). The result represents acceleration compared to market performance in the first half of the year (+4,3% Year on Year, with that, the advance totals 5,8% compared to the same period last year
The IODE-PMEs functions as an economic thermometer for companies with annual revenues of up to R$50 million, divided into 701 economic activities that make up four major sectors: Trade, Industry, Infrastructure and Services
Figure 1: IODE-PMEs
(Index number – base: average 2021=100
Source: IODE-PMEs (Omie)
Felipe Beraldi, economist and manager of Indicators and Economic Studies at Omie, cloud management platform (ERP), explain that the expansion of the SME market reflects the favorable moment of economic activity in the country, driven by the sustained strong consumption of households. The heated job market – with unemployment below the 7% threshold and real incomes at higher levels –, besides the expansionary fiscal policy, especially with the expansion of cash transfer programs, has produced significant effects on household consumption. Additionally, even though the BCB has resumed raising interest rates in light of growing concerns about inflation, the modest cycle of declines between August 2023 and May 2024 may have benefited some market segments, even if marginally, complete
SMEs in Commerce were the main contributors to the overall improvement of the market, having advanced 15,7% YoY in the third quarter of the year, consolidating the recovery movement initiated in the previous quarter (+4,6% ano a ano. The results were positive both in retail SMEs (+10,9% YoY) as in wholesale (+17,4% ano a ano, with emphasis on 'Packaging', 'Food' and 'Machines and equipment for industrial use'. Among the activities with the best performance in retail, are 'Pharmaceutical products with formula manipulation', 'Paints and materials for painting' and 'Electrical materials'
The SMEs in the industry follow the positive trend of the first half of the year (+11,5% ano a ano, with an additional evolution of 9% in this third quarter compared to the annual. In general terms, the expansion of the sector continues to be widespread among most activities, considering that, of the 22 subsectors of the manufacturing industry monitored by IODE-SMEs, 16 showed progress in the period, comment Beraldi. The most relevant activities were 'Transport equipment', 'Furniture', 'Printing and reproduction of recordings' and 'Machines, electrical devices and materials
Already in the Services sector, after a certain loss of breath in the second quarter (increase of only 0,6% ano a ano, small and medium businesses have shown positive results again in the third quarter (+4,0% Year on Year. The economist explains that, despite the increase in inflation expectations and the return of rising interest rates, the increase in family income ensures the dynamism of various activities in the sector. Transport and storage, 'Administrative activities and complementary services' and 'Services for buildings and landscaping activities' were the activities with the greatest development.
The Infrastructure SMEs, in turn, after two quarters of decline, they showed growth again in the third quarter of 2024 (+6,5% ano a ano. The result reflects the progress observed in segments such as 'Collection, waste treatment and disposal, 'Electricity' and 'Specialized services for construction'. On the other hand, they attributed the more positive results of the sector in recent months to the maintenance of weak performance in some segments of the construction industry, such as 'Infrastructure Works' and 'Building Construction'
The IODE-PMEs also allows for regional analysis. In the period, SMEs in the Southeast and Northeast regions saw an increase of 7,9% compared to Q3 2023. The South region advanced +8,8%. On the other hand, the Central-West and North regions showed a contraction during the period (-3,1% and -1,6% compared to Q3 2023, respectively
SMEs should maintain good performance in the short term
SMEs maintain a robust trajectory of evolution, reflecting the continuity of economic recovery in the short term. Based on recent results, the growth expectation for small and medium businesses is +6,4%, in relation to the previous year. For the last quarter of the year, it is expected that the commercial dates, howBlack Fridayand year-end festivities, further boost the sector
By 2025, the projection is for more moderate growth (+2,2% year on year, aligned with the expectation of a slowdown in Brazilian GDP (+1,9%). According to Beraldi, the increase in inflation and the resumption of rising interest rates may curb consumption and investments, with an impact especially on SMEs starting from the second quarter of 2025. The stabilization of the labor market and the reduction of fiscal stimuli should also contribute to a slower pace of expansion
"Sectorally", it is expected that the growth of SMEs will continue to be concentrated in the Services and Trade sectors, driven by household consumption. The sectors of Industry and Infrastructure, more dependent on credit, tend to be affected by high interest rates in the short term, the economist finishes
