Construction confidence rises 2.6 points in July, says FGV

The Construction Confidence Index (ICST) rose for the second month in a row. The indicator advanced 2.6 points in July in relation to June, to 85.4 points, returning to the level observed in December 2018 (85.4 points), said on Friday (26) The Fundação Getulio Vargas (FGV). In quarterly moving averages, the ICST Rose 1.0 point. The growth reflects improvement in the current business environment and more favorable short-term expectations, notes in note Ana Maria Castelo, project coordinator of the construction of the Brazilian Institute of Economics (Ibre) of FGV. "The second semester begins with high confidence, the second consecutive. The imminence of approval of the pension reform and the resumption of the works of the Programa my Casa my life certainly contributed to the improvement of the scenario in these last two months, "he says. However, the Economist ponders that if the adoption of a policy to encourage consumption compromises the source of financing of the housing program, there will be no support in this improvement in the medium and long term. The high of the ICST in July was pulled by both the improvement of the current situation and the expectations of the short term, according to FGV. The current situation index (ISA-CST) Advanced 1.5 point, to 75.1 points, returning to the same level of January 2019 (75.1 points). The contribution of the positive result ISA-CST came from the indicator that measures the perception about the current situation of the contract portfolio: it rose 1.4 Point, to 73.5 points. In addition, it also helped in this process the high of 1.6 point (to 76.9 points) of the indicator of the current situation of the business. The expectations index (IE-CST) was high of 3.5 points and reached 96.0 points-level, however, below that recorded in December 2018 (96.5 points). FGV explains that the two items of this index contributed positively to the result. The demand indicator predicted in the next three months advanced 2.3 points, to 95.5 points, better performance since December 2018 (97.2 points), and the trend indicator of the business in the next six months increased 4.7 points, to 96.6 points. The sector's capacity utilization level (NUCI) recorded the fourth high followed by varying 0.6 percentage point in July to 68.9%. This is the highest result since July 2015 (69.4%), according to FGV. Both the NUCI for machinery and equipment and the Nuci for Labor varied 0.4 and 0.7 percentage points, respectively. In the interannual confrontation, the construction confidence index grew 4.4 points. By segments, the infrastructure works recorded the highest elevation of the ICST, especially the expectations, which recorded strong high on this basis of comparison, driven by the expected demand of the category of infrastructure works. " Perhaps the uncertainties about the continuity of the My House my Life program have cooled the expectations of entrepreneurs in the building sector. On the other hand, the prospect of improvement in the business environment brought more encouragement to entrepreneurs in the segment of infrastructure works ", evaluates Ana Maria Castelo. However, the Economist considers that there are still no elements that allow a glimpse of a robust improvement in the activity in the short term.