The Monthly Civil Construction Index (INCC-M) rose 0.32% in January, after going up 0.27% in December and 9.05% in the last 12 months. As of January 2022, the index had increased 0.64% that month and 13.70% in the previous 12 months. The rate for Materials, Equipment and Services went from 0.38% in December to -0.12% in January. The figure for Labor rose 0.77% in January, after increasing 0.16% in December.

Materials, Equipment and Services

In the Materials, Equipment and Services group, the Materials and Equipment rate fell 0.26% in January, after rising 0.37% the previous month. Three of the four component subgroups presented declines in their rates of variation, most notably Structural Materials, which went from 0.62% to -0.55%. Services went from 0.43% in December to 0.53% in January. In this group, it is worth noting the Service and Licensing Fees item, which increased from 0.00% to 2.40%.

Labor

The rate of variation for Labor rose 0.77% in January, after going up 0.16% in December.

State capitals

Two Brazilian state capitals experienced increases in their rates of variation: Salvador and Belo Horizonte. On the other hand, there were declines in Brasilia, Recife, Rio de Janeiro, Porto Alegre and Sao Paulo.

What is INCC-M? 

The Monthly Civil Construction Index (INCC-M) is an economic indicator that captures the evolution of residential construction costs. It makes it possible to track changes in the prices of key materials, labor and services for the construction industry. 

What is the scope of geographical coverage? 

The indicator covers seven Brazilian state capitals: Belo Horizonte, Brasilia, Porto Alegre, Recife, Salvador, Rio de Janeiro and Sao Paulo. 

How is it calculated? 

INCC-M is calculated in line with a system of weightings and prices of a sample of inputs (goods, equipment, services and labor) that are significant for the construction industry.  

In addition to its overall results, covering all elements of the samples, INCC-M is broken down into two main groups: 

- Materials, Equipment and Services

- Labor

The national index results from the weighted arithmetic mean of the seven cities in question. Monthly price surveys are carried out between the 21^st day of the month prior to the reference month and the 20^th day of the reference month.  

For the market, what is the benefit from tracking INCC? 

As indicated below, INCC tracks changes in the prices of materials and labor in the residential construction industry. Thus, it is a good indicator of the evolution of production costs for construction companies, as well as other building and renovation projects. It also provides valuable information for manufacturers and retailers, besides supporting decision making by other economic agents.

For more information, see the full study here.