Activity and Employment in Construction Reach Highest Value in Six Years

RIO DE JANEIRO, BRAZIL – The activity and employment indicators in the construction industry reached their highest value in the last six years in July, reported on Friday, August 23rd, the National Confederation of Industry (CNI).

The Construction Industry Survey shows that the activity level index increased 0.2 points compared to June and stood at 48.4 points in July. The index of the number of employees rose slightly by 0.1 points and reached 47.3 points. However, the two indicators remain below fifty points, reflecting a drop in activity and employment, notes the survey.

“However, the drop is increasingly less intense and less widespread in the sector. Activity and employment levels have gradually improved since the beginning of this year,” says the survey.

According to the survey, the level of operational capacity utilization stood at 57 percent in July, the same level recorded in June, and five percentage points above the historical average. This means that the sector operated with 43 percent idle personnel, machines, and equipment last month. Idleness is lower in large companies, a segment in which the average utilization of installed capacity has reached 59 percent. In small companies, the level of utilization of installed capacity was 51 percent, and 57 percent for medium-sized companies.

According to the CNI, due to the high level of idleness, entrepreneurs’ inclination to make investments has decreased. The investment intention index fell 3.5 points in August compared to July and stood at 33.1 points, virtually the same level as in May, and 0.6 points below the historical average. The indicator varies from zero to one hundred points. The higher the value, the greater the inclination to make investments.

Forecast

The Construction Entrepreneur Confidence Index (ICEI-Construction) was stable at 58.8 points in August and remained above the historical average of 53.3 points. The ICEI-Construction varies from zero to one hundred points. When it is above fifty points, it shows entrepreneurs are confident.

According to the CNI, this edition of the Construction Industry Survey was conducted between August 1st and 13th with 494 companies. Of these, 169 are small, 213 medium and 112 are large-sized.