Construction confidence drops 1.7 points in January, to 93.6 points, says FGV

The Construction Confidence Index (ICST) fell 1.7 points in January, after retreating 0.3 points in December, informed this Thursday (26) the Getulio Vargas Foundation (FGV). With the result, the index reached 93.6 points, the lowest level since March 2022 (92.9 points). In quarterly moving averages, the ICST lost 2.4 points.

“Construction entrepreneurs start the year more pessimistic compared to the last quarter of 2022”, says the coordinator of Construction Projects at Ibre/FGV, Ana Maria Castelo, in a note.

Ana Castelo attributes the fourth consecutive monthly drop in confidence to the worsening both in the current business environment and in expectations. She assesses that the deterioration of future perceptions in recent months reflects “a perception of greater uncertainty for business in view of the possibility of maintaining interest rates at high levels for longer”.

In openings, the Current Situation Index (ISA-CST) retreated 1.5 points, to 95.1 points, the lowest level since July 2022 (94.8). The current business situation indicator dropped 1.8 points to 93.2 points, and the contract portfolio volume indicator dropped 1.1 points to 97.0 points.

The Expectations Index (IE-CST), in turn, dropped 2.1 points to 92.2 points, reaching the lowest mark since May 2021 (89.0), with a drop in forecast demand of 2.9 points, to 93.4 points, and the business trend, by 1.7 points, to 91.2 points.

The Level of Use of Installed Capacity (Nuci), on the other hand, rose 0.6 percentage points, to 78.9%. In the openings, the Nuci de Mão de Obra was up by 0.8 point, to 80.4%, and that of Machinery and Equipment retreated by 0.1 point, to 71.8%.