Construction sector confidence in Brazil index drops to 96.1 points after 5 months of highs, says FGV
RIO DE JANEIRO, BRAZIL – The Construction Confidence Index (ICST) of the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre) fell 0.3 points 96.1 points, after five consecutive months of rises. In quarterly moving averages, the index was stable by varying 0.1 points.
“A more pessimistic assessment of the business in the present led to the first drop in confidence in the sector in six months. The movement reflects different perceptions of business owners in the various segments: confidence fell among Land Preparation companies, but rose again in the Construction segment.
“In any case, the consolidated indicator for the evolution of activity has settled at a level that signals a positive perception by companies, with a more favorable position than before the Covid-19 pandemic,” observed Ana Maria Castelo, coordinator of Construction Projects at FGV Ibre, in a comment in the report.
In October, the drop in the SSTI was exclusively due to the worsening assessment of the current moment. The Present Situation Index (ISA-CST) dropped 0.7 to 92.0 points, interrupting two months of consecutive highs.
This retreat resulted from the drop of 1.4 points in the indicator measuring the current business situation to 90.8 points. In contrast, the contract portfolio indicator remained relatively stable this month, going from 93.3 to 93.4 points.
The Expectations Index (IE-CST) settled down, by changing 0.1 points, to 100.3 points. This result is influenced by divergence in the outlook of the indicators that make up the IE-CST. The indicator for forecast demand rose 0.6 points to 101.8 points, and the business tendency indicator dropped 0.4 points to 98.8 points.
The Construction Capacity Utilization Level (Nuci) rose 0.6 percentage points (p.p.) to 75.6%. The Nuci for Labor advanced 0.7 percentage points to 76.9%, while the Nuci for Machinery and Equipment remained stable at 68.3%.
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