Construction GDP should grow 2.4% in 2023, according to Sinduscon-SP and FGV

The Gross Domestic Product (GDP) of civil construction is expected to grow 2.4% in 2023, according to a projection by the Construction Industry Union (Sinduscon-SP) and the Getulio Vargas Foundation (FGV) released this Tuesday, 6.

The scenario, if confirmed, will represent a significant slowdown in activities compared to 2022, when GDP will close at a 7% increase, and 2021, when it hit 10%.

The coordinator of construction studies at FGV, Ana Maria Castelo, attributed this cooling to the prospect of few works and domestic renovations, since families are heavily indebted and without major real income changes.

“A big weight in the perspective of the deceleration comes from the ‘family effect’, responsible for self-construction and renovation. This component is what is pulling the GDP down”, highlighted Castelo, during a press conference.

Another problem, according to her, is the expectation of a reduction in the pace of activity in the Brazilian economy as a whole, combined with difficulties in controlling public accounts.

“We see a complicated fiscal situation for the States due to the loss of ICMS. Some are trying to react by increasing taxation, which is bad for the productive sectors. We have a challenge there.”

Despite the slowdown, Castelo assessed that the sector tends to remain healthy next year.

“The data is not negative. Obviously, the pace is reduced, but we are still talking about growth. And it is still strong”, he pondered, remembering that the construction GDP will increase more than the GDP of Brazil as a whole. “Projections for the country’s GDP are below 1% for next year.”

On the positive side, construction GDP tends to be boosted by the progress in the cycle of residential and commercial works, after so many launches and sales in the last two to three years.

There is also hope for a stronger performance of the infrastructure, as the investments made by the companies that won the concessions are converted into works, in fact.

The doubt in the field of infrastructure, however, is in the capacity of the public sector.

“There is a perspective of continued investments here. But we know, of course, the importance of public sector participation in helping to sustain these investments, because private investments are not enough on their own”, stressed Castelo. “The signs that give us more security are suspended.”