Economy

FGV: Construction confidence drops 5.3 points this month, biggest drop since April 2020

The Construction Confidence Index (ICST) fell 5.3 points in November, to 95.6 points, informed this Friday, 25, the Getulio Vargas Foundation (FGV). In quarterly moving averages, the index retreated by 0.9 points. The November result was the biggest drop since April 2020 and also represents the lowest level since March this year, when the index reached 92.9 points.

“After seven months, signaling moderate optimism, the perception in relation to business and demand for the next three months suffered a significant setback, which affected the three sectoral segments”, says the coordinator of Construction Projects at Ibre/FGV, Ana Maria Castelo, in a note.

Castelo also notes that “it is evident that the shock of expectations can be associated with the results of the elections. Uncertainties regarding the economic policy of the next government led to fears of a worsening in the future business environment. On the other hand, the current activity indicator continues to show signs of improvement. In other words, the sector is growing, but the future is uncertain”.

In openings, the Current Situation Index (ISA-CST) retreated 1.6 points, to 97.0 points, the lowest level since August (96.4 points). The result was driven by the worsening volume of the portfolio of contracts, which fell 1.7 points, to 98.8 points, and the indicator that measures the current business situation, which dropped 1.4 points, to 95.2 points.

The Expectations Index (IE-CST), in turn, fell 8.8 points, to 94.4 points, the lowest mark since March, when it had reached 93.9 points. Among the components of the group, the business trend indicator for the next six months dropped 10.1 points, to 93.4 points, and the demand outlook indicator dropped 7.4 points, to 95.4 points.

The Level of Use of Installed Capacity (Nuci) for construction rose 2.1 percentage points to 79.2%. In the openings, the Nuci de Mão de Obra advanced 2.2 points, to 80.4%, and the Nuci de Máquinas e Equipamentos increased by 2.0 percentage points, to 73.9%.

São Paulo's GDP drops 3.5% in 2020, in the 1st year of the pandemic -

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