Construction confidence remains stable in March at 94.4 points

Economist Felipe Queiroz explains that market agents are moderately apprehensive about the sector’s prospects, and lists the reasons: “First, we have an adverse external scenario, interest rate hikes worldwide, a more pronounced deceleration trend in the global economy , and in the domestic scenario, which is what most influences the indicator, we have a very high interest rate”.

interest interference

The specialist also points out that the interest rate in the country is one of the highest real interest rates in the world, and this prevents some investments and the process of taking out credit for families, because it makes credit very expensive and reduces the offer. Another point remembered by the economist is the difficulty of finding qualified labor. According to Queiroz, these factors have a direct impact on confidence in the sector.

The interference of interest rates in the Index was also pointed out by economist Carlos Eduardo Oliveira Júnior, advisor to the São Paulo Regional Economic Council as a determining factor: “The very high interest rates inhibit investment, and a smaller investment causes confidence to stop. to go up. As in this case, the Civil Construction Confidence Index, something that depends a lot on the issue of interest, when interest rates are very high, demand drops”. According to Oliveira Júnior, the market is waiting for measures to restore confidence and investment in civil construction.

“The outlook is for improvement with the return of the PAC, the main one for housing construction, whether for low- and middle-income people, and we are also expecting a reduction in interest rates, this will make the sector stronger”, explained the economist.

ICST indices

The stability of the index results from the opposite 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 straight months of decline. The increase in this indicator is exclusively due to the improvement in the perception of entrepreneurs about the current business situation, which increased by 0.5 points, to 92.2 points. The contract portfolio indicator remained stable, changing -0.1 points to 95.2 points, the lowest level since March last year.

The Expectations Index (EI-CST) dropped 0.3 points to 95.3 points, remaining relatively stable after the increase recorded in the previous month. The drop in this index was influenced by the business trend indicator for the coming months, which dropped 1.4 points to 92.3 points. The forecast demand indicator increased by 0.9 points, reaching 98.3 points.