The Construction Confidence Index (ICST) fell for the fourth consecutive month, reaching the lowest level since July last year (83.7 points), according to Fundação Getulio Vargas (FGV). The sector survey indicator dropped 3.8 points to 85.0 points. In quarterly moving averages, it decreased by 2.5 points.
According to the coordinator of Construction Projects at FGV of the Brazilian Institute of Economics (Ibre), Ana Maria Castelo, the worsening in the sectoral scenario reflects the concern about scarcity and rising costs, in addition to the worsening of the pandemic. Business confidence, he says, has returned to a level lower than that observed before the pandemic, with the two components of the indicator reversing all the improvement registered since May 2020.
“The problem persists and gives no indication of a respite, reaching ongoing contracts and making product pricing difficult. The new element in April was the significant increase in the number of entries in terms of insufficient demand as a limitation to the improvement of the companies' business, probably due to the closing of the sales stands in some cities ”, says Castelo in a note.
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The Current Situation Index (ISA-CST) decreased 3.5 points, to 84.3 points, against 87.8 points in March. The drop in ISA-CST was influenced by the worsening of the current business situation indicator, which fell 6.3 points to 84.4, the lowest level since August 2020 (81.8).
The Expectations Index (IE-CST) fell 4.0 points, to 86.0 points, the lowest level since June 2020. The accumulated drop in the last six months is 13.1 points. According to FGV, the performance reflects the lower expectation of entrepreneurs in relation to demand, since the forecasted demand indicator yielded 7.6 points, to 84.7 points, the lowest result since June 2020 (83.1).
The Capacity Utilization Level (Nuci) of Construction increased 5.3 percentage points (pp), to 77.1%. Nuci de Manpower made the biggest contribution, advancing 5.6 pp, reaching 78.6%, followed by NUCI for Machinery and Equipment, which increased 4.4 p, to 70.5%.
According to FGV, the first months of 2021 represent a clear inflection of the resumption, since the Recent Activity Evolution indicator returned to a level similar to that of August 2020. Thus, in April, 16.0% of the companies signaled a reduction in the number of employees in the coming months, while 12.1% indicated intention to hire. "After overcoming the pre-pandemic level, the sector moved sideways, unable to take off," says the institution in a note.
