Improved Expectations for SMEs, but Investment Conditions Remain Unfavorable

Business confidence rose by 2.7 percentage points (p.p.) to 43 points in the second quarter of 2026 compared to the first, according to data from the SME Observatory Foundation. Although it still shows a year-on-year decline of 4.5 p.p., the indicator reflects an improvement from the beginning of the year. This figure averages entrepreneurs' evaluations of their companies, the sector, and the country, their expected profitability, and their willingness to invest.

Meanwhile, the manufacturing industry recorded an even more pronounced advance of 10.3 p.p., reaching 44.3 units, while it remained just 0.7 p.p. below last year's level. Here, entrepreneurs summarize decisions regarding purchases, production, and inventories, which adjust before the change is reflected in quantitative statistics.

Both results show a recovery in expectations and the manufacturing industry compared to the beginning of the year, but they still do not allow for talking about a consolidated reactivation of expectations or the productive framework.

Business Confidence.

"Business confidence precedes decision-making: what the entrepreneur expects from their company, sector, and country conditions, in the short term, how much they produce, how much they hire, and how much they invest. Measuring it systematically and comparably allows for anticipating those decisions before they appear in activity statistics," the report highlights.

Current conditions advanced slightly to 32.2 points (+2 p.p.), although they remain well below 50. In contrast, future expectations rose to 52.1 points (+3.8 p.p.) and surpassed the 50 threshold again. The gap between both dimensions is 19.8 points.

The exception is the moment to invest, the only component that declined in the quarter, down to 34.6 points (-1.7 p.p.). This indicates that the improvement in the climate has not yet translated into a greater willingness to invest in machinery and equipment.

This is also related to an industry that is using only 58.4% of its installed capacity, implying that it maintains more than 40% idle capacity.

The neutral threshold of the manufacturing industry indicator is set at 50 points: above this level indicates expansion, and below indicates contraction. In the second quarter, all five components that make up the PMI-PyME remained below that boundary.

"The rebound is consistent with the seasonal pattern of this quarter, which averaged +7.7 points (3 cases) between 2023 and 2025," the report notes.

The component measuring the order backlog stood at 42.6 points and serves as an early signal of the demand faced by companies. Production, on the other hand, reached 45.4 points, also in contraction territory. Meanwhile, employment remained below the expansion threshold at 44.7 points, reflecting that there are still more companies reducing staff than those hiring workers.

Another component was the supplier delivery time, which reached 48.9 points. The PMI methodology considers that an extension of delivery times can be an expansive signal when it responds to increased demand pressure on the supply chain.

Finally, the stock of inputs stood at just 39.4 points, the lowest value among the components. This variable allows for approximating companies' anticipated purchasing decisions.

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