2nd SEMESTER 2021
In the second edition of the International Business Report for 2021, 62% of Brazilian entrepreneurs revealed optimism about the next 12 months. This index was very close to the one registered a year ago (61%), but it was not enough to boost the country's position in the global ranking, dropping from 10th to 13th place.
However, the country registered an average of 64% optimism in 2021, its highest percentage since 2012, when it reached 77%.
The increase in the positive expectations of entrepreneurs was also observed in other countries around the world. In Ireland, first in the ranking, this index was 85%, followed by China (83%), and the United States, Philippines and Vietnam (80%).
Despite the drop in the ranking, confidence in revenue growth and an increase in turnover among Brazilians jumped 6 p.p. to 82%, an index that puts the country in third place in this item, behind Indonesia (87%) and Vietnam (85%). Latin America appears with 72% and the global index was 58%.
The profitability item followed the same positive line, with 82% of Brazilian entrepreneurs confident in its increase. At the top appears Vietnam (87%), followed by Brazil (82%) and Nigeria (81%). Latin America, at 65%, was well above the global index of 54%.
Regarding the number of jobs, Brazilians are the ones with the highest growth expectation for the next 12 months. With an index of 76%, 3 p.p. above the previous result, Brazil takes the lead in this item, followed by Vietnam (71%) and India (70%). It is worth mentioning that in the first half of 2020, with the arrival of the covid pandemic, the country presented one of the lowest expectations, of only 46%.
Investments in team skills continue to rise in the country, confirmed by 78% of entrepreneurs, against 75% in past research. Thus, Brazil and Nigeria, with the same index, were second only to Indonesia, with 79%, and followed by India, with 76%. The Latin American index was 62% and the global average was 55%.
Respondents also highlighted investments in research and development for the next 12 months. Brazil reached the index of 76% of those who intend to invest more, compared to 74% in the second half of 2021. In the global ranking, the country maintained the second place – tied with India –, behind Nigeria, with 79%, and ahead of Vietnam, with 74%. The global average stood at 55% and Latin America at 60%.
The Information Technology sector has also been gaining prominence with each edition of the research. Of the Brazilian entrepreneurs consulted, 81% said they will invest more in the next 12 months. In the annual average of previous surveys, the index was 70% in 2020 and 76% in 2021, against 64% in the pre-pandemic covid period in 2019.
For Brazilian business leaders, the main obstacles are the lack of financing (47%), which is even more serious in India (73%), China and Vietnam (60%), and in the United States (57%); and the lack of qualified professionals for 55% in Brazil, 76% in India, 67% in the United States, and 66% in Canada.
Economic uncertainties also appear as an obstacle for 63% of Brazilians, an index that is even higher in India (82%), South Africa (70%) and Argentina (69%), in addition to transport infrastructure, a problem pointed out by 47% of respondents in Brazil, 75% in India, 62% in the United States and 57% in Canada.
The question about wages brings a rather curious result, in most of the participating countries. Responses about the expectations for wage increases were very high: 98% in India, 94% in Argentina, 90% in the United States and the United Kingdom, and 80% in Brazil. Conversely, on the expectation of real wage increases, the indexes plummeted. Only 15% of Brazilian respondents believe in this possibility. The most optimistic entrepreneurs are those from India (58%), the United States (40%), and Germany (38%).
In the evaluation of Daniel Maranhão, Grant Thornton Brazil’s CEO, these results show the enthusiasm of Brazilian entrepreneurs and of several other countries with the resumption of the economy in the next 12 months, in what is believed to be the post-pandemic, thanks to the advance of vaccination against Covid-19 around the world.
"Logically, the maintenance of this scenario will depend on how global health authorities will act to contain the emergence of new strains of the coronavirus, especially in less developed countries and with limited resources for mass vaccination, as well as in convincing the population of developed countries to get vaccinated", he ponders.
For the executive, currently, the Brazilian entrepreneur shows a high level of optimism due to the economic recovery presented in 2021, after the most critical period of the pandemic, and the gradual evolution of this recovery in the next year.
"Despite the rise in inflation and the trend of rising interest rates, entrepreneurs envision the continuity in the growth of their businesses, based on the perspective of new infrastructure projects and the improvement in household consumption in 2022, driven by the programs of investment and assistance to low-income families promoted by the Brazilian Government.
The International Business Report (IBR) is published every six months by Grant Thornton and provides relevant information for the competitiveness of middle-market companies. We will also publish additional information from our survey throughout the year.
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