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Best Performance in Seven Years for Brazil’s Small Businesses

Brazilian small business Revenues of micro and small businesses in the southeastern Brazilian state of São Paulo grew 2.4% in the first quarter of 2008 in comparison with the same period of 2007, representing growth of 1.5 billion reais (US$ 905 million) in total revenues, which stood at 62.3 billion reais (US$ 37.5 billion).

The data were taken from the Sebrae Indicators/São Paulo survey for March 2008, conducted on a monthly basis by the Brazilian Micro and Small Business Support Service (Sebrae) in partnership with the Seade Foundation, among 2,700 micro and small companies in the industry, trade and services sectors.

The average monthly revenues of micro and small businesses in the first quarter this year was 15,900 reais (US$ 9,588). According to the survey, this is the best performance of micro and small companies in São Paulo for the first quarter of the year since 2001, considering the inflationary adjustment for the period.

In terms of regions, it was the interior of the state that boosted the growth in the quarter, 4.3% rise in company revenues. Companies in the Metropolitan Region of São Paulo, the state capital, had their revenues growing 0.7%, whereas in the city of São Paulo and Greater ABC region, all cities that are closely tied, there was a reduction of 2.7% and 2.4%, respectively.

Trade powered growth in the period, with 8.2% expansion in revenues in comparison with the first quarter of 2008 as against the first quarter of 2007. The sector, especially in the interior, is being benefited by the improvement on the domestic market and by the agricultural boom.

Micro and small companies in industry and services did not post the same performance in the region and registered drops in revenues in the period, 6.6% and 2%, respectively, on average in the state.

Real worker revenues in micro and small companies also grew in the first quarter of the year, registering growth of 2.7% over the same quarter last year, with trade boosting this tendency, growing 3.8%, followed by the service sector (+2.9). Industrial employees had a 1.1% reduction in revenues.

But if salaries grew, the same cannot be said about the number of work posts. The research shows that the average number of people employed by micro and small companies dropped 2.1% in the quarter, when compared to the same period in 2007.

In the first three months of 2007, there were 4.3 people per company, on average. In the first quarter of 2008, this figure dropped to 4.2 people per company. The reduction in the average number of people per company took place in all three sectors: trade (down 1.4%), industry (1.6% reduction) and services (3.7 contraction).

In the evaluation of Marco Aurélio Bedê, the coordinator of the research, "this result cannot be interpreted as a reduction in the total number of people employed in small businesses. In reality, as the economy has returned to growth, some relatives who used to work in small companies are finding other opportunities on the labour market. Work posts have also been opened through the establishment of new companies, but with fewer employees."

Sebrae

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