construction industry survey AWS
CNI indicators ISSN 2317-7322 • Year 8 • Number 9 • September 2017
CONSTRUCTION INDUSTRY SURVEY Financial conditions of construction industry continue to recover The indicators measuring industrial performance continue to show a decline in activity and employment in the construction industry, albeit at a slower pace than in 2016. The financial condition indices grew for the second consecutive quarter, showing that entrepreneurs are less dissatisfied with their profit margins and financial situation. Among the main problems indicated by entrepreneurs in the third quarter are a high tax
load, insufficient domestic demand, and lack of working capital. For the next few months, entrepreneurs are more confident about their companies’ situation and about the economic scenario. In addition, the expectation indicators have shown that activity levels have improved while new developments and services, purchases of inputs and raw materials, and number of employees have held steady.
Satisfaction with profit margins and financial situation* Diffusion index (0-100 points)
Satisfaction 50 44.5 Insatisfaction
39.1 36.1
35.0
39.3 34.4 31.9
Q3 2014
Q4
Q1 2015
Q2
Profit margins
Q3
32.3
Q4
Q1 2016
Financial situation
Q2
Q3
Q4
Q1 2017
Q2
Q3
Dividing line
*The indices range from 0 to 100 points. Figurse below 50 points indicate dissatisfaction with profit margins and/or financial conditions.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN SEPTEMBER 2017
Construction industry experiences decline in activity and employment in September The activity level indicator remained virtually stable as it fell from 46.7 points in August to 46.4 points in September. On the same comparison basis, the indicator of number of employees dropped from 45.8 points to 45.2 points.
Readings below 50 points indicate a month-overmonth decline in activity and employment. The further below 50 points, the more significant and widespread the decline.
Activity level index* Diffusion index (0-100 points)
Increase
50
Decrease 44.5 41.5 40.0
39.3
39.3
43.3
46.7
46.4
AUG
SEP
44.3
44.1 42.8
40.3
37.9
SEP 2016
OCT
NOV
DEC
JAN 2017
FEB
MAR
Activity level
APR
MAY
JUN
JUL
Dividing line
* The index ranges from 0 to 100 points. Figures above 50 points indicate an increase in activity levels.
Idleness remains high, but operating capacity utilization grows gradually The construction industry is still operating below usual levels. The activity level indicator dropped by 0.9 points between August and September, down from 33.4 points to 32.5 points. Readings below 50 points indicate that activity is below usual levels for the month.
2
The operating capacity utilization rate increased for the third consecutive month and reached 58% in September, up from 57% in August. The figure, however, is down by 6 percentage points from the historical average for the month.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
FINANCIAL CONDITIONS OF CONSTRUCTION INDUSTRY IN THE 3 RD QUARTER OF 2017
Entrepreneurs are less dissatisfied with their financial situation The indicators measuring financial conditions edged up for the second consecutive quarter, but remain below the 50-point mark, showing that entrepreneurs are less dissatisfied with their companies’ financial situation. The index of
satisfaction with profit margins increased from 33.1 in the second quarter to 34.4 points in the third quarter. On the same comparison basis, the index measuring satisfaction with financial situation increased from 37.2 points to 39.1 points.
Companies face fewer difficulties in accessing credit The index of ease of access to credit grew by 1.3 points between the second and third quarter of 2017, posting its third consecutive quarterly
gain. However, the fact that the indicator remains below the 50-point mark shows that enterprises are still having a hard time accessing credit.
Ease of access to credit* Diffusion index (0-100 points)
Easy
50
32.9
Diffcult
29.8
Q3 2014
Q3 2015
Q3 2016
Ease of access to credit
Dividing line
* The indices range from 0 to 100 points. Figures above 50 points indicate easier access to credit.
3
Q3 2017
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
PROBLEMS FACED BY THE CONSTRUCTION INDUSTRY IN THE 3 RD QUARTER OF 2017
High tax burden once again ranks first among major problems A high tax burden was indicated as the main problem faced by construction entrepreneurs in the third quarter of 2017, with 32.3% of responses. After six quarters, this item returns to first place in the ranking.
Main problems faced by the construction industry in the quarter (%)* Percentage (%) 32.3
High interest rates
Coming next with 30.6% of responses is the issue of insufficient internal demand, which fell to second place after ranking first for five consecutive quarters.
29.7 30.6
Insufficient domestic demand
35.8 27.7
Lack of working capital
24.3 27.2 28.5
Client delinquency
Lack of working capital and client delinquency – two issues that have an impact on companies’ financial conditions – ranked third and fourth respectively, with 27.7% and 27.2% of answers.
22.8
High tax burden
27.9 21.3 20.1
Excessive red tape Lack of long-term funding
14.5 12.0
Unfair competition (informality, smuggling, etc.)
13.9 12.0 12.3 11.9
Legal uncertainty 9.3 8.3
None
8.2
Others
6.1 7.1 4.6
Environmental licensing Lack or high cost of skilled labor
5.9 6.2
Lack or high cost of raw materials
5.3 6.6
Lack or high cost of unskilled labor Weather conditions Lack or high cost of energy Difficulties in transportation logistics (roads, etc.) Lack or high cost of support equipment Availability of land
3.8 4.9 3.1 5.2 2.4 1.8 1.6 1.8 0.9 1.7
Q3 2017 Q2 2017
0.8 2.7
* Each company may indicate up to three items, so the sum of percentages exceeds 100%.
4
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN OCTOBER 2017
Expectations point to increased activity levels in coming months The indicator of expected activity levels dropped from 52.5 points in September to 51.7 points in October. Despite the decline, the indicator remains above the 50-point mark, suggesting that activity levels are expected to increase over the next six months.
and services, purchases of inputs and raw materials, and number of employees will likely hold steady. The indicator measuring expected new developments and services dropped from 51.3 points in September to 50.6 points in October, while the indicators of expected purchases of inputs and raw materials and of number of employees dropped respectively by 1.0 and 0.8 points, standing at 49.6 and 49.8 points.
The other expectation indicators remained close to 50 points, indicating that new developments
Expectation indices* Diffusion indexes (0-100 points)
Activity level
New developments and services
Increase
Increase
52.5
51.7
51.3
50
50.6
50
49.8
45.2
48.4
44.7 Decrease
Decrease
OCT 2016
DEC
FEB 2017
APR
JUN
AUG
OCT
OCT 2016
Expected activity level Dividing line
DEC
FEB 2017
APR
JUN
AUG
OCT
Expected develompents and services Dividing line
Purchases of raw materials
Number of employees
Increase
Increase
50.6
50.6
50
50
49.8
48.4
48.2
44.6
Decrease
Decrease
43.3
OCT 2016
DEC
FEB 2017
APR
JUN
AUG
OCT 2016
OCT
Expected purchases of raw materials Dividing line
DEC
FEB 2017
APR
Expected number of employees Dividing line
The expectation indices range from 0 to 100 points. Figures above 50 points indicate an expected decline.
5
JUN
AUG
OCT
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
Investment intentions grow for third consecutive month Entrepreneurs are more likely to invest. The index measuring investment intentions increased for
the third month in a row as it rose from 29.8 in September to 30.4 points in October.
Investment intentions index* Diffusion index (0-100 points)
60
55.9
50
43.0 40
30
30.4
28.8
25.2
20 JAN 2014
JUN
NOV
APR 2015
SEP
FEB 2016
JUL
DEC
MAY 2017
OCT
* The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN OCTOBER
Construction entrepreneurs are more confident The Construction Business Confidence Index (ICEIConstruction) grew for the third straight month and hit the mark of 53.8 points in October. The index has drifted further away from the dividing line between confidence and lack of confidence and exceeded the historical average for the series (52.6 points). The result indicates a recovery in confidence among construction entrepreneurs.
The increase is explained by an improvement in the expectation indicator, which recorded growth of 0.6 points between September and October, up from 57 points to 57.6 points. The indicator measuring current conditions held steady at 46.1 points and continues to show deterioration in current business conditions.
Historical series of the ICEI-Construction* Diffusion index (0-100)
Confidence
56.6
56.8
53.8
historical average = 52.6 50.1
54.2
50
45.2 Lack of confidence
34.4 OCT 2011
APR 2012
OCT
APR 2013
OCT
APR 2014
OCT
ICEI - Construction
APR 2015
OCT
APR 2016
OCT
APR 2017
OCT
Dividing line
* Figures below 50 points indicate lack of business confidence. The further below 50 points, the greater and more widespread the lack of confidence.
6
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
RESULTS BY COMPANY SIZE Construction industry performance OPERATION CAPACITY UTILIZATION (%) 1
ACTUAL-USUAL ACTIVITY LEVEL3
ACTIVITY LEVEL 2
NUMBER OF EMPLOYEES2
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
57
57
58
41.5
46.7
46.4
28.5
33.4
32.5
39.7
45.8
45.2
SMALL
53
52
55
41.7
47.2
45.4
30.7
35.8
35.6
40.3
46.5
45.8
MEDIUM
57
59
58
44.5
46.6
47.1
30.4
32.9
31.9
42.6
45.4
45.7
LARGE
58
58
60
39.7
46.5
46.3
26.6
32.8
31.7
37.9
45.7
44.6
CONSTRUCTION
Financial conditions in the quarter SATISFACTION WITH PROFITS 4
AVERAGE PRICES OF RAW MATERIALS EVOLUTION 2
Q3 2017 Q3 2016
Q3 2017 Q3 2016
EASE TO ACCESS CREDIT 5
Q3 2017 Q3 2016
Q2 2017
Q3 2017
28.0
28.5
29.8
38.7
26.3
29.1
31.5
37.6
39.0
28.1
28.2
29.3
38.2
39.4
28.5
28.4
29.4
Q3 2016
Q2 2017
32.3
33.1
34.4
53.4
51.7
57.1
35.0
37.2
39.1
SMALL
33.8
31.6
35.8
54.8
51.7
55.3
36.5
33.9
MEDIUM
32.0
33.4
34.5
53.1
51.9
55.3
35.9
LARGE
31.9
33.5
33.8
53.1
51.5
58.8
33.9
CONSTRUCTION
Q2 2017
SATISFACTION WITH FINANCIAL SITUATION 4 Q2 2017
Expectations of construction industry ACTIVITY LEVEL6
NEW DEVELOPMENTS AND SERVICES 6
PURCHASES OF INPUTS AND RAW MATERIALS 6
NUMBER OF EMPLOYEES 6
INVESTIMENT INTENTION 7
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
45.2
52.5
51.7
44.7
51.3
50.6
44.6
50.6
49.6
43.3
50.6
49.8
28.8
29.8
30.4
SMALL
48.0
51.5
49.9
45.8
50.3
47.9
45.6
49.3
47.8
44.9
48.6
46.5
28.2
29.8
31.0
MEDIUM
47.4
50.7
52.0
47.9
49.7
49.3
46.4
48.1
49.1
46.5
48.7
48.7
28.1
28.2
29.3
LARGE
43.0
53.9
52.2
42.4
52.6
52.3
43.2
52.6
50.6
40.9
52.4
51.7
29.5
30.7
30.8
CONSTRUCTION
Construction Business Confidence Index (ICEI - Construction) and its components ICEI - CONSTRUCTION8
CURRENT CONDITIONS9
EXPECTATIONS10
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
50.1
53.4
53.8
37.9
46.1
46.1
56.2
57.0
57.6
SMALL
49.4
54.1
52.4
38.8
46.7
44.6
54.9
57.8
56.5
MEDIUM
51.8
53.4
53.8
39.4
45.6
45.6
58.1
57.2
57.9
LARGE
49.3
53.2
54.4
36.8
46.2
47.0
55.6
56.6
57.9
CONSTRUCTION
1 - The indicator varies in the 0%-100% interval. Series started in January 2012. 2 - The indicator varies in the 0-100 interval. Figures above 50 points indicate growth. 3 - The indicator varies in the 0-100 interval. Figures above 50 points indicate higher-than-usual activity levels. 4 - The indicator varies in the 0-100 interval. Figures above 50 points indicate satisfaction. 5 - The indicator varies in the 0-100 interval. Figures above 50 points indicate ease of access. 6 - The indicator varies in the 0-100 interval. Figures above 50 points indicate positive expectations. 7 - The indicator varies in the 0-100 interval. The higher the index, the greater the willingness to invest. 8 - The ICEI varies in the 0-100 interval. Figures above 50 points indicate business confidence. 9 - The indicator varies in the 0-100 interval. Figures above 50 points values indicate a better situation as compared to the last six months.. 10 - The indicator varies in the 0-100 interval. Figures above 50 points indicate optimistic expectations for the next six months.
7
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
Main problems CONSTRUCTION
Q2-17 ITEMS
%
SMALL
Q3-17 %
Q2-17
Ranking
%
MEDIUM
Q3-17 %
Q2-17
Ranking
%
LARGE
Q3-17 %
Q2-17
Ranking
%
Q3-17 %
Ranking
High tax burden
29.7% 32.3%
1
37.1% 39.8%
1
31.3% 33.6%
11
23.3% 26.2%
2
Insufficient domestic demand
35.8% 30.6%
2
25.9% 26.9%
2
34.4% 29.4%
2
43.3% 34.4%
1
Lack of working capital
24.3% 27.7%
3
21.3% 24.4%
4
21.1% 27.3%
19
30.0% 30.3%
4
Client delinquency
28.5% 27.2%
4
29.9% 23.4%
6
29.3% 27.3%
13
26.7% 29.5%
5
High interest rates
27.9% 22.8%
5
28.9% 25.9%
3
28.5% 21.3%
8
26.7% 23.0%
17
Excessive red tape
20.1% 21.3%
6
24.9% 23.9%
5
21.9% 22.7%
17
15.0% 18.0%
18
Lack of long-term funding
12.0% 14.5%
7
8.6%
10.4%
9
12.5% 14.3%
20
13.3% 17.2%
12
Unfair competition (informality, smuggling, etc.)
12.0% 13.9%
8
15.2% 20.4%
7
11.3% 12.2%
14
10.8% 12.3%
6
Legal uncertainty
11.9% 12.3%
9
12.2% 11.4%
8
9.8%
10.8%
16
14.2% 14.8%
11
None
8.3%
9.3%
10
10.2%
8.5%
10
8.6%
8.0%
3
6.7%
11.5%
9
Others
6.1%
8.2%
11
6.1%
5.5%
13
5.5%
9.4%
6
6.7%
8.2%
14
Environmental licensing
4.6%
7.1%
12
3.6%
5.0%
15
5.5%
6.6%
9
4.2%
9.0%
19
Lack or high cost of unskilled workers
6.2%
5.9%
13
7.6%
8.0%
11
5.9%
5.6%
4
5.8%
4.9%
16
Lack or high cost of raw materials
6.6%
5.3%
14
6.6%
5.0%
14
5.1%
6.3%
5
8.3%
4.1%
15
Lack or high cost of unskilled workers
4.9%
3.8%
15
4.6%
6.0%
12
3.5%
3.8%
7
6.7%
2.5%
13
Weather conditions
5.2%
3.1%
16
5.6%
3.0%
16
6.6%
4.2%
12
3.3%
1.6%
7
Lack or high cost of energy
1.8%
2.4%
17
1.5%
1.5%
18
0.8%
2.1%
18
3.3%
3.3%
20
Difficulties in transportation logistics (roads, etc.)
1.8%
1.6%
18
1.5%
1.5%
17
2.7%
1.0%
15
0.8%
2.5%
8
Lack or high cos of support equipment
1.7%
0.9%
19
1.5%
1.0%
19
1.2%
1.0%
1
2.5%
0.8%
10
Availability of land
2.7%
0.8%
20
1.5%
1.0%
20
3.5%
1.4%
10
2.5%
0.0%
3
Technical specifications Sample profile: 615 enterprises, including 204 small, 287 medium and 124 large. Data collection period: October 2-17, 2017.
i
Learn more For more information on the survey, including sectoral results, previous editions, methodology and historical series, visit: www.cni.org.br/e_sondconstr
CONSTRUCTION INDUSTRY SURVEY | English version of “Sondagem Indústria da Construção - Setembro/2017” | Monthly publication of the National Confederation of Industry - CNI | www. cni.org.br | Policy and Strategy Unit - DIRPE | Economic Policy Unit - PEC| Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Analysis: Flavia Coelho Branco Junqueira Ferraz | Team: Roxana Campos, Aretha Silícia Lopez Soares and Luis Fernando Melo Mendes (CBIC) | CNI Publishing Center | Graphic design supervision: Carla Gadêlha | Customer Service - Phone: +55 (61) 3317-9992 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
CONSTRUCTION INDUSTRY SURVEY Financial conditions of construction industry continue to recover The indicators measuring industrial performance continue to show a decline in activity and employment in the construction industry, albeit at a slower pace than in 2016. The financial condition indices grew for the second consecutive quarter, showing that entrepreneurs are less dissatisfied with their profit margins and financial situation. Among the main problems indicated by entrepreneurs in the third quarter are a high tax
load, insufficient domestic demand, and lack of working capital. For the next few months, entrepreneurs are more confident about their companies’ situation and about the economic scenario. In addition, the expectation indicators have shown that activity levels have improved while new developments and services, purchases of inputs and raw materials, and number of employees have held steady.
Satisfaction with profit margins and financial situation* Diffusion index (0-100 points)
Satisfaction 50 44.5 Insatisfaction
39.1 36.1
35.0
39.3 34.4 31.9
Q3 2014
Q4
Q1 2015
Q2
Profit margins
Q3
32.3
Q4
Q1 2016
Financial situation
Q2
Q3
Q4
Q1 2017
Q2
Q3
Dividing line
*The indices range from 0 to 100 points. Figurse below 50 points indicate dissatisfaction with profit margins and/or financial conditions.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN SEPTEMBER 2017
Construction industry experiences decline in activity and employment in September The activity level indicator remained virtually stable as it fell from 46.7 points in August to 46.4 points in September. On the same comparison basis, the indicator of number of employees dropped from 45.8 points to 45.2 points.
Readings below 50 points indicate a month-overmonth decline in activity and employment. The further below 50 points, the more significant and widespread the decline.
Activity level index* Diffusion index (0-100 points)
Increase
50
Decrease 44.5 41.5 40.0
39.3
39.3
43.3
46.7
46.4
AUG
SEP
44.3
44.1 42.8
40.3
37.9
SEP 2016
OCT
NOV
DEC
JAN 2017
FEB
MAR
Activity level
APR
MAY
JUN
JUL
Dividing line
* The index ranges from 0 to 100 points. Figures above 50 points indicate an increase in activity levels.
Idleness remains high, but operating capacity utilization grows gradually The construction industry is still operating below usual levels. The activity level indicator dropped by 0.9 points between August and September, down from 33.4 points to 32.5 points. Readings below 50 points indicate that activity is below usual levels for the month.
2
The operating capacity utilization rate increased for the third consecutive month and reached 58% in September, up from 57% in August. The figure, however, is down by 6 percentage points from the historical average for the month.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
FINANCIAL CONDITIONS OF CONSTRUCTION INDUSTRY IN THE 3 RD QUARTER OF 2017
Entrepreneurs are less dissatisfied with their financial situation The indicators measuring financial conditions edged up for the second consecutive quarter, but remain below the 50-point mark, showing that entrepreneurs are less dissatisfied with their companies’ financial situation. The index of
satisfaction with profit margins increased from 33.1 in the second quarter to 34.4 points in the third quarter. On the same comparison basis, the index measuring satisfaction with financial situation increased from 37.2 points to 39.1 points.
Companies face fewer difficulties in accessing credit The index of ease of access to credit grew by 1.3 points between the second and third quarter of 2017, posting its third consecutive quarterly
gain. However, the fact that the indicator remains below the 50-point mark shows that enterprises are still having a hard time accessing credit.
Ease of access to credit* Diffusion index (0-100 points)
Easy
50
32.9
Diffcult
29.8
Q3 2014
Q3 2015
Q3 2016
Ease of access to credit
Dividing line
* The indices range from 0 to 100 points. Figures above 50 points indicate easier access to credit.
3
Q3 2017
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
PROBLEMS FACED BY THE CONSTRUCTION INDUSTRY IN THE 3 RD QUARTER OF 2017
High tax burden once again ranks first among major problems A high tax burden was indicated as the main problem faced by construction entrepreneurs in the third quarter of 2017, with 32.3% of responses. After six quarters, this item returns to first place in the ranking.
Main problems faced by the construction industry in the quarter (%)* Percentage (%) 32.3
High interest rates
Coming next with 30.6% of responses is the issue of insufficient internal demand, which fell to second place after ranking first for five consecutive quarters.
29.7 30.6
Insufficient domestic demand
35.8 27.7
Lack of working capital
24.3 27.2 28.5
Client delinquency
Lack of working capital and client delinquency – two issues that have an impact on companies’ financial conditions – ranked third and fourth respectively, with 27.7% and 27.2% of answers.
22.8
High tax burden
27.9 21.3 20.1
Excessive red tape Lack of long-term funding
14.5 12.0
Unfair competition (informality, smuggling, etc.)
13.9 12.0 12.3 11.9
Legal uncertainty 9.3 8.3
None
8.2
Others
6.1 7.1 4.6
Environmental licensing Lack or high cost of skilled labor
5.9 6.2
Lack or high cost of raw materials
5.3 6.6
Lack or high cost of unskilled labor Weather conditions Lack or high cost of energy Difficulties in transportation logistics (roads, etc.) Lack or high cost of support equipment Availability of land
3.8 4.9 3.1 5.2 2.4 1.8 1.6 1.8 0.9 1.7
Q3 2017 Q2 2017
0.8 2.7
* Each company may indicate up to three items, so the sum of percentages exceeds 100%.
4
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN OCTOBER 2017
Expectations point to increased activity levels in coming months The indicator of expected activity levels dropped from 52.5 points in September to 51.7 points in October. Despite the decline, the indicator remains above the 50-point mark, suggesting that activity levels are expected to increase over the next six months.
and services, purchases of inputs and raw materials, and number of employees will likely hold steady. The indicator measuring expected new developments and services dropped from 51.3 points in September to 50.6 points in October, while the indicators of expected purchases of inputs and raw materials and of number of employees dropped respectively by 1.0 and 0.8 points, standing at 49.6 and 49.8 points.
The other expectation indicators remained close to 50 points, indicating that new developments
Expectation indices* Diffusion indexes (0-100 points)
Activity level
New developments and services
Increase
Increase
52.5
51.7
51.3
50
50.6
50
49.8
45.2
48.4
44.7 Decrease
Decrease
OCT 2016
DEC
FEB 2017
APR
JUN
AUG
OCT
OCT 2016
Expected activity level Dividing line
DEC
FEB 2017
APR
JUN
AUG
OCT
Expected develompents and services Dividing line
Purchases of raw materials
Number of employees
Increase
Increase
50.6
50.6
50
50
49.8
48.4
48.2
44.6
Decrease
Decrease
43.3
OCT 2016
DEC
FEB 2017
APR
JUN
AUG
OCT 2016
OCT
Expected purchases of raw materials Dividing line
DEC
FEB 2017
APR
Expected number of employees Dividing line
The expectation indices range from 0 to 100 points. Figures above 50 points indicate an expected decline.
5
JUN
AUG
OCT
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
Investment intentions grow for third consecutive month Entrepreneurs are more likely to invest. The index measuring investment intentions increased for
the third month in a row as it rose from 29.8 in September to 30.4 points in October.
Investment intentions index* Diffusion index (0-100 points)
60
55.9
50
43.0 40
30
30.4
28.8
25.2
20 JAN 2014
JUN
NOV
APR 2015
SEP
FEB 2016
JUL
DEC
MAY 2017
OCT
* The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN OCTOBER
Construction entrepreneurs are more confident The Construction Business Confidence Index (ICEIConstruction) grew for the third straight month and hit the mark of 53.8 points in October. The index has drifted further away from the dividing line between confidence and lack of confidence and exceeded the historical average for the series (52.6 points). The result indicates a recovery in confidence among construction entrepreneurs.
The increase is explained by an improvement in the expectation indicator, which recorded growth of 0.6 points between September and October, up from 57 points to 57.6 points. The indicator measuring current conditions held steady at 46.1 points and continues to show deterioration in current business conditions.
Historical series of the ICEI-Construction* Diffusion index (0-100)
Confidence
56.6
56.8
53.8
historical average = 52.6 50.1
54.2
50
45.2 Lack of confidence
34.4 OCT 2011
APR 2012
OCT
APR 2013
OCT
APR 2014
OCT
ICEI - Construction
APR 2015
OCT
APR 2016
OCT
APR 2017
OCT
Dividing line
* Figures below 50 points indicate lack of business confidence. The further below 50 points, the greater and more widespread the lack of confidence.
6
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
RESULTS BY COMPANY SIZE Construction industry performance OPERATION CAPACITY UTILIZATION (%) 1
ACTUAL-USUAL ACTIVITY LEVEL3
ACTIVITY LEVEL 2
NUMBER OF EMPLOYEES2
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
57
57
58
41.5
46.7
46.4
28.5
33.4
32.5
39.7
45.8
45.2
SMALL
53
52
55
41.7
47.2
45.4
30.7
35.8
35.6
40.3
46.5
45.8
MEDIUM
57
59
58
44.5
46.6
47.1
30.4
32.9
31.9
42.6
45.4
45.7
LARGE
58
58
60
39.7
46.5
46.3
26.6
32.8
31.7
37.9
45.7
44.6
CONSTRUCTION
Financial conditions in the quarter SATISFACTION WITH PROFITS 4
AVERAGE PRICES OF RAW MATERIALS EVOLUTION 2
Q3 2017 Q3 2016
Q3 2017 Q3 2016
EASE TO ACCESS CREDIT 5
Q3 2017 Q3 2016
Q2 2017
Q3 2017
28.0
28.5
29.8
38.7
26.3
29.1
31.5
37.6
39.0
28.1
28.2
29.3
38.2
39.4
28.5
28.4
29.4
Q3 2016
Q2 2017
32.3
33.1
34.4
53.4
51.7
57.1
35.0
37.2
39.1
SMALL
33.8
31.6
35.8
54.8
51.7
55.3
36.5
33.9
MEDIUM
32.0
33.4
34.5
53.1
51.9
55.3
35.9
LARGE
31.9
33.5
33.8
53.1
51.5
58.8
33.9
CONSTRUCTION
Q2 2017
SATISFACTION WITH FINANCIAL SITUATION 4 Q2 2017
Expectations of construction industry ACTIVITY LEVEL6
NEW DEVELOPMENTS AND SERVICES 6
PURCHASES OF INPUTS AND RAW MATERIALS 6
NUMBER OF EMPLOYEES 6
INVESTIMENT INTENTION 7
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
45.2
52.5
51.7
44.7
51.3
50.6
44.6
50.6
49.6
43.3
50.6
49.8
28.8
29.8
30.4
SMALL
48.0
51.5
49.9
45.8
50.3
47.9
45.6
49.3
47.8
44.9
48.6
46.5
28.2
29.8
31.0
MEDIUM
47.4
50.7
52.0
47.9
49.7
49.3
46.4
48.1
49.1
46.5
48.7
48.7
28.1
28.2
29.3
LARGE
43.0
53.9
52.2
42.4
52.6
52.3
43.2
52.6
50.6
40.9
52.4
51.7
29.5
30.7
30.8
CONSTRUCTION
Construction Business Confidence Index (ICEI - Construction) and its components ICEI - CONSTRUCTION8
CURRENT CONDITIONS9
EXPECTATIONS10
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
50.1
53.4
53.8
37.9
46.1
46.1
56.2
57.0
57.6
SMALL
49.4
54.1
52.4
38.8
46.7
44.6
54.9
57.8
56.5
MEDIUM
51.8
53.4
53.8
39.4
45.6
45.6
58.1
57.2
57.9
LARGE
49.3
53.2
54.4
36.8
46.2
47.0
55.6
56.6
57.9
CONSTRUCTION
1 - The indicator varies in the 0%-100% interval. Series started in January 2012. 2 - The indicator varies in the 0-100 interval. Figures above 50 points indicate growth. 3 - The indicator varies in the 0-100 interval. Figures above 50 points indicate higher-than-usual activity levels. 4 - The indicator varies in the 0-100 interval. Figures above 50 points indicate satisfaction. 5 - The indicator varies in the 0-100 interval. Figures above 50 points indicate ease of access. 6 - The indicator varies in the 0-100 interval. Figures above 50 points indicate positive expectations. 7 - The indicator varies in the 0-100 interval. The higher the index, the greater the willingness to invest. 8 - The ICEI varies in the 0-100 interval. Figures above 50 points indicate business confidence. 9 - The indicator varies in the 0-100 interval. Figures above 50 points values indicate a better situation as compared to the last six months.. 10 - The indicator varies in the 0-100 interval. Figures above 50 points indicate optimistic expectations for the next six months.
7
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 9 • September 2017
Main problems CONSTRUCTION
Q2-17 ITEMS
%
SMALL
Q3-17 %
Q2-17
Ranking
%
MEDIUM
Q3-17 %
Q2-17
Ranking
%
LARGE
Q3-17 %
Q2-17
Ranking
%
Q3-17 %
Ranking
High tax burden
29.7% 32.3%
1
37.1% 39.8%
1
31.3% 33.6%
11
23.3% 26.2%
2
Insufficient domestic demand
35.8% 30.6%
2
25.9% 26.9%
2
34.4% 29.4%
2
43.3% 34.4%
1
Lack of working capital
24.3% 27.7%
3
21.3% 24.4%
4
21.1% 27.3%
19
30.0% 30.3%
4
Client delinquency
28.5% 27.2%
4
29.9% 23.4%
6
29.3% 27.3%
13
26.7% 29.5%
5
High interest rates
27.9% 22.8%
5
28.9% 25.9%
3
28.5% 21.3%
8
26.7% 23.0%
17
Excessive red tape
20.1% 21.3%
6
24.9% 23.9%
5
21.9% 22.7%
17
15.0% 18.0%
18
Lack of long-term funding
12.0% 14.5%
7
8.6%
10.4%
9
12.5% 14.3%
20
13.3% 17.2%
12
Unfair competition (informality, smuggling, etc.)
12.0% 13.9%
8
15.2% 20.4%
7
11.3% 12.2%
14
10.8% 12.3%
6
Legal uncertainty
11.9% 12.3%
9
12.2% 11.4%
8
9.8%
10.8%
16
14.2% 14.8%
11
None
8.3%
9.3%
10
10.2%
8.5%
10
8.6%
8.0%
3
6.7%
11.5%
9
Others
6.1%
8.2%
11
6.1%
5.5%
13
5.5%
9.4%
6
6.7%
8.2%
14
Environmental licensing
4.6%
7.1%
12
3.6%
5.0%
15
5.5%
6.6%
9
4.2%
9.0%
19
Lack or high cost of unskilled workers
6.2%
5.9%
13
7.6%
8.0%
11
5.9%
5.6%
4
5.8%
4.9%
16
Lack or high cost of raw materials
6.6%
5.3%
14
6.6%
5.0%
14
5.1%
6.3%
5
8.3%
4.1%
15
Lack or high cost of unskilled workers
4.9%
3.8%
15
4.6%
6.0%
12
3.5%
3.8%
7
6.7%
2.5%
13
Weather conditions
5.2%
3.1%
16
5.6%
3.0%
16
6.6%
4.2%
12
3.3%
1.6%
7
Lack or high cost of energy
1.8%
2.4%
17
1.5%
1.5%
18
0.8%
2.1%
18
3.3%
3.3%
20
Difficulties in transportation logistics (roads, etc.)
1.8%
1.6%
18
1.5%
1.5%
17
2.7%
1.0%
15
0.8%
2.5%
8
Lack or high cos of support equipment
1.7%
0.9%
19
1.5%
1.0%
19
1.2%
1.0%
1
2.5%
0.8%
10
Availability of land
2.7%
0.8%
20
1.5%
1.0%
20
3.5%
1.4%
10
2.5%
0.0%
3
Technical specifications Sample profile: 615 enterprises, including 204 small, 287 medium and 124 large. Data collection period: October 2-17, 2017.
i
Learn more For more information on the survey, including sectoral results, previous editions, methodology and historical series, visit: www.cni.org.br/e_sondconstr
CONSTRUCTION INDUSTRY SURVEY | English version of “Sondagem Indústria da Construção - Setembro/2017” | Monthly publication of the National Confederation of Industry - CNI | www. cni.org.br | Policy and Strategy Unit - DIRPE | Economic Policy Unit - PEC| Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Analysis: Flavia Coelho Branco Junqueira Ferraz | Team: Roxana Campos, Aretha Silícia Lopez Soares and Luis Fernando Melo Mendes (CBIC) | CNI Publishing Center | Graphic design supervision: Carla Gadêlha | Customer Service - Phone: +55 (61) 3317-9992 – email: [email protected] | This publication may be copied, provided that the source is mentioned.
