Construction Confidence Index falls 0,3 points nationwide.
The research is from the Getúlio Vargas Foundation.
Brazil Agency - The Construction Confidence Index (ICST) did not vary in March and remained at 94,4 points, a level of moderate pessimism. In three-month moving averages, the index fell 0,3 points. It was released this Tuesday (28), in Rio de Janeiro, by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV).
According to Ana Maria Castelo, Project Coordinator for Construction at Ibre/FGV, the outlook for demand in the coming months has improved for the second consecutive month. She highlighted that a more negative perception of the business environment trend has affected the expectations indicator, which closed the first quarter without recovering from the recent decline, pointing to moderate pessimism in the sector.
“As already observed in February, the pace of activity signals a slowdown – the recent evolution indicator closed the quarter with a decline. Thus, companies also indicate a lower intention to hire. However, the limitation imposed by difficulties in hiring qualified labor has been increasing and reached the highest level of reports since March 2015, a sign that the growth cycle has not been reversed,” Ana Maria assessed in a statement.
Opposite variations
According to FGV, the stability of the index results from the opposing variations of the two components of the index. “The Current Situation Index of the Construction Confidence Index (ISA-CST) rose 0,3 points to 93,7 points, after four consecutive months of decline. The rise in the ISA-CST is due exclusively to the improvement in business owners' perception of the current business situation indicator, which increased by 0,5 points to 92,2 points. The order book indicator remained stable, varying -0,1 points to 95,2 points, the lowest level since March of last year (94,4 points),” the study reports.
The Expectations Index (IE-CST) fell 0,3 points to 95,3 points, remaining relatively stable after the increase recorded in the previous month. The drop in the IE-CST was influenced by the indicator that measures business trends for the coming months, which fell 1,4 points to 92,3 points. Meanwhile, the indicator of expected demand rose 0,9 points, reaching 98,3 points.
The Capacity Utilization Rate (CUR) for Construction varied by 0,2 percentage points (pp), to 77,9%. The Labor CUR remained stable with a variation of -0,1 pp, to 78,9%, while the Machinery and Equipment CUR increased by 1,7 pp, to 73,6%.
Access to credit
For 2023, the financial market projected a decline in the granting of housing loans. "Higher rates and more stringent contracting conditions represent a more adverse environment for buyers and businesses. In the last two months, in fact, there has been a slight increase in reports regarding access to bank credit as a limiting factor for business, but still far from constituting a threat to the recent business cycle," reported Ibre/FGV.