As the chicken sleeps: the Brazilian outlook for 2014

By B.J. Richards

In the course of researching our report on the 2013 Brazil consulting market, we stumbled upon (and immediately fell in love with) the term “chicken flight” – an evocative little phrase Brazilians use to describe their economy’s unfortunate cycle of noisy take-offs followed by clumsy crashes. There’s just so much in it, from the truly winning visual to the realization that, wow, it really must happen a lot if they have a name for it. It’s certainly some of the best economic shorthand we’ve heard.

The Brazilian chicken suffered his most recent indignity in late 2012 when, following 10 years of noble soaring, he succumbed to gravity once again. Of course, 10 years is quite an impressive run -- so much so that there are those who believed (and continue to believe) that the poor creature had at long last managed to transform himself, perhaps into an eagle. We’re not prepared to make any judgements on Brazilian Avian Transmutation Theory at this time, but regardless of species, it is clear that the bird is, at the very least, taking a bit of a snooze.

But just as certainly as the Brazilian chicken is currently convalescing, he will ultimately take to the skies again. When or for how long is anyone’s guess, but it seems unlikely that 2014 will be the year. Election years are rarely good for growth, and then there’s the World Cup, which promises to both giveth and taketh away (yes, it will bring in a lot of foreign money, but we’re also hearing that large chunks of the economy will virtually shutter their doors while it happens, and that can’t be good.) So the chicken – assuming he still is a chicken – seems destined to rest up for at least another year.

What does this mean for Brazil’s consultants, many of whom have placed rather high-stakes bets on this chicken’s long-term vitality? Well, the first thing we would say is that despite the significantly slowed economy, consulting in Brazil is not such a bad gig. The consulting industry performed well above GDP in 2012, and that’s a trend we expect to continue. The nation got a nice, middle-of-the-road score in our recent 2014 attractiveness index, and there are certainly worse places you could be (we’re looking at you, over-hyped Africa . . .).

The next thing we would say (admittedly related to the first) is that one should not panic. There’s every reason to believe that those who are able to make their margins work though the slowdown (or who have the resources to take on some degree of loss) will be well positioned in a more mature, slimmed down market once the economy picks up again. You just have to hang on until then. Of course, that's the tricky part.

So, how best to ride out the storm (or turbulence, if we’re still working that flying chicken analogy)? The mobile explosion means that things are looking good for consultants in Brazil’s technology, media, and telecoms sector this year, and the continuing success of Brazil’s middle class means a sunny outlook for retail and pharmaceuticals as well. Relatedly, this year’s most in-demand consulting services will be in tech and in marketing & selling.  And those aren’t 2014's only good bets -- at the risk of sounding a bit sales-y, I should mention there’s a lot more on the prospects of these and other sectors and services in our recent Brazil report.

Though we fully expect 2014 to be characterized by an unwelcome quiet, we are confident that Brazil's consultants will find plenty to do while the chicken snoozes.  And, besides, there's still a chance he's going to wake up and prove himself to be an eagle after all.  Won't you be glad you stuck around to watch him take flight?