Construction Cost Index changes 0.18% in March

Measured by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre FGV), the National Construction Cost Index (INCC-M) for this month of March changed by 0.18% in March. The percentage is lower than that found in February, when the index changed by 0.21%. In the accumulated result for this year, the index has increased by 0.70%, and in the last 12 months the increase is 8.17%.

Economist Newton Ferreira explains that it is necessary to analyze the index based on the movement of the market, taking into account the economic challenges and the country’s interest rate. “The National Civil Construction Index remains under pressure in 12 months, still more than 8% in 12 months (…) We have to wait for what will happen to the economy throughout the year, if there is a recovery there may be a reheating of the sector, as well as an expected reduction in the basic interest rate should also be a way to stimulate the sector, because then new financing appears”, he explained.

Composition of the index

In the Materials, Equipment and Services group, the indicator equivalent to Materials and Equipment fell by 0.07% in March. The variation relative to Services increased by 0.88% in March. The variation referring to the Labor index rose 0.27% in March.

Regarding this scenario, economist Felipe Queiroz emphasizes the low expectation of economic growth and how this impacts the sector: “So in this scenario, what we have observed is the level of activity in the general economy, which is already quite low, with the economy growing at a maximum of 1% this year, according to expectations, and a very high interest rate, this increases the cost of production”, he clarified.

Searched Cities

Five capitals showed a decrease in their rates of change: Brasília, Belo Horizonte, Recife, Rio de Janeiro and São Paulo. On the other hand, Salvador and Porto Alegre showed an increase in the variation of the index. The INCC-M is calculated based on prices collected between the 21st of the previous month and the 20th of the reference month.