BRASILIA, May 26 (Reuters) - Brazilian industrial confidence rose in May, a survey showed on Thursday, marking the first rise in five months as businesses looked through the current COVID-19 crisis towards brighter prospects in the coming months. The Fundacao Getulio Vargas’s national industrial confidence index for May rose 0.7 points to a seasonally adjusted 104.2 from 103.5 in April, according to preliminary figures. The FGV’s industrial confidence survey showed that the expectations index rose 2.1 points to 99.0, but the current conditions index fell 0.5 points to 109.5, the lowest since September. Slack in the industrial sector narrowed in May as capacity utilization rose 1.1 percentage points to 77.8%, the survey showed. A growing batch of indicators - notably formal job growth and federal tax collection - suggest the economy is holding up against the second wave of the pandemic better than many had feared. Several big banks recently raised their 2021 economic growth forecasts to 4% or higher, and Economy Minister Paulo Guedes this week said that growth could even reach 5%. But industry is losing steam. The pace of expansion in the manufacturing sector slowed to a 10-month low in April, according to IHS Markit’s latest purchasing manager index report. (Reporting by Jamie McGeever Editing by Chizu Nomiyama) Our Standards: The Thomson Reuters Trust Principles.