The Construction Confidence Index (ICST) dropped 0.8 point in November, to 95.3 points, informed this Thursday the Fundação Getulio Vargas (FGV). With the second consecutive monthly drop, the quarterly moving average of the indicator decreased by 0.3 point, after five consecutive months of increase.
“The second consecutive drop in confidence among construction entrepreneurs reflects a year end with a more challenging scenario for companies”, says the coordinator of Construction Projects at Ibre/FGV, Ana Maria Castelo, in a note. “The activity lost momentum in November, although the perception of growth still predominates.
The ICST contraction in November was driven by the Expectations Index (IE-CST), which fell 1.6 points to 98.7 points, below the neutral level of 100 points. In openings, the trend indicator for business over the next six months dropped 2.3 points, while the forecast demand indicator dropped 1.0 point, to 100.8 points.
“The rise in interest rates, more widespread inflation and rising costs undermine expectations of the continuation of the improvement trend in business”, assesses Ana Maria Castelo.
The Current Situation Index (ISA-CST), at the other end, was stable in November, at 92.0 points. The behavior was influenced by opposite variations in the indicators of current business situation, with an increase of 1.0 point, to 91.8 points, and of the contract portfolio, which fell by 1.0 point, to 92.4 points.
The Installed Capacity Utilization Level (NUCI) in Construction advanced 1.7 percentage points in November, to 77.3%. FGV found an increase in capacity utilization both in the opening of Labor (76.9% to 78.6%) and in the Machinery and Equipment sub-index (68.3% to 70.1%).
According to FGV, 45.7% of the companies surveyed indicated their intention to raise their prices in the coming months, given the increase in the National Construction Cost Index (INCC-M) in 2021. Only 1.9% indicate a decrease in prices .
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