The CEIC Leading Indicator is a proprietary dataset designed by CEIC Insights to precede the development of major macroeconomic indicators and predict the turning points of the economic cycle for key markets. It is a composite leading indicator which is calculated by aggregating and weighting selected leading indicators covering various important sectors of the economy, such as financial markets, the monetary sector, labour market, trade and industry. It is developed through a proprietary CEIC methodology and employs data from the CEIC database. The CEIC Leading Indicator currently covers eight regions – Brazil, China, India, Indonesia, Russia, the Euro Area, Japan and the United States.

​​The CEIC Leading Indicator for Brazil soared to 76.43 in June, after registering a record low of 28.75 in April and a modest uptick of 39.05 in May. Despite the improvement, the value is still lower than the neutral point of 100, which means that the country’s economy is expected to operate below the long term trend in the coming 6 to 9 months. The positive performance in June was supported by some key variables. Motor vehicle sales jumped to 135,130 units in June, compared to 56,266 in May, as many factories resumed operations in the period.

The manufacturing sector had better prospects in June, revealed by a partial rebound of the industry’s confidence indicator. In construction, expectations to purchase raw materials approached the neutral value of 50 points in June, rising to 44.2, compared to 35.3 in May. The equity market index reached 95,056 points at the end of June, after sinking to 73,019 in March, while international oil prices saw a partial recovery, rising to USD 37 per barrel in June, compared to USD 25.2 in the previous month.

In June Brazil remained posed for a severe recession in 2020, as the main leading indicator stayed well below the neutral point of 100 for the fourth month in a row, with a significant impact on the long term trend. As a consequence, the smoothed CEIC Leading Indicator continues on a downward trend, reaching 51.6 in June, the lowest value on record. Notably, the smoothed indicator went below the neutral value of 100 in February, before the COVID-19 spread on Brazilian territory, as revealed by relevant changes in some of its components such as commodity prices and financial indices.

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