Published by FGV’s Brazilian Institute of Economics (IBRE), the Construction Confidence Index (CSTI) varied 0.2 point in June, reaching 74.2 points in seasonally adjusted data. As a result, the index returned to the level recorded in September 2016.

“The slight increase in the CSTI in June suggests that the perceived effect of higher uncertainty regarding the business segment after May 17 was insignificant. The sector-based breakdown of the result reveals different dynamics among the major segments of the industry. In the Buildings segment – less dependent on direct government initiatives –, expectations rose once again in June, after a significant fall in the previous month. In the Infrastructure Works segment, there was an additional decrease in the last month,” said Ana Maria Castelo, Construction Project Coordinator at IBRE.

The CSTI rose in June due to a discrete improvement in the current assessment of companies and short-term prospects: both indexes increased by 0.2 point. The highlight of the Current Situation Index was the indicator that measures the current business situation, which increased by 1.2 points, totaling 65.8 points, after dropping 2.2 points in May.

The Expectations Index rose due to an increase in the indicator that measures optimism regarding business situation in the next six months, which rose 0.4 point to 86.0 points, after falling 3.8 points in the previous month.

The industry’s Level of Capacity Utilization fell 0.6 percentage point (p.p.) in June, reaching 61.5% – 21.4 percentage points below the highest level in the survey’s historical series, recorded in September 2013 (82.9%). 

Construction Survey indicators still show some pessimism among companies in the industry. The significant worsening of expectations in Infrastructure Works over the last couple of months illustrates how the current scenario of political instability perpetuates such pessimistic outlook on the business segment.

The complete results of the Construction Survey are available on the website.