The latest figures for confidence in Brazil construction show the highest levels for nearly a decade. Analysts point to the innovation in the sector and the drop in fuel prices as the main factors behind the surge. Consumer confidence also rose in tandem as did the expectations index, indicating solid foundations for Brazil as the country prepares for general elections.
Confidence in Brazil construction up to highest for a decade
The Confidence in Construction Index (ICSTI rose by 1.4 points in August, bringing it to 98.2 points. This is the highest level since December 2013 when it reached 98.3 points.
The reduction in fuel prices is one of the main reasons behind the increase, although industry experts also point to the wide-ranging recovery in the economy. “The civil construction sector is a positive thermometer,” explained the economist Wandemberg Almeida, interviewed in the press. “If it goes up, the economy is doing well as the latest figures show.”
Ceara construction set for a strong year
Ceará is one of the regions in Brazil where construction is currently riding a high. According to a survey carried out recently by the Civil Construction Union (Sinduscon-CE), the sector should achieve higher than forecast growth this year.
Expectations for revenue from real estate in Ceará exceed R$3 billion for this year. “The civil construction sector is very strategic in absorbing employment and improving job creation to generate wealth,” said Davi Azin, Economist at Ceará Economic Council (Corecon-CE). He also believes that the fall in the dollar has been fundamental in dropping prices for imports of materials.
Innovation in Brazil construction
The ability to adapt to changing consumer preferences also stands in civil construction’s favour and renews confidence in the sector. ‘Compact properties’ are currently in high demand and a major factor behind the boom in construction.
These smaller homes allow more Brazilians to access housing. “They obviously mean a win for the economy in Fortaleza and Ceará when families look for housing that fits their budget,” said Almeida.
Innovation in Brazilian mortgages has also boosted Brazil construction as banks strive to keep interest rates for loans below double-digits. As a result, the higher rates set by the Brazilian Central Bank have had lesser effects on consumers generally.
Consumers more confidence
In tandem with the biggest rise in confidence in construction in Brazil for nearly a decade goes the uptick in consumer confidence. This index also rose in August and the 4.1-point increase was the third consecutive monthly rise.
According to analysts, the continual increases have their roots in consumers’ higher optimism about the future. For Almeida, this lies in wider access to credit announced by banks in the last few months.
The Expectations Index also saw an increase, the latest by 6 points taking it to 92.6 points as Brazilians look forward to the autumn with optimism.
(Source: Opiniao CE)