construction industry survey AWS
CNI indicators ISSN 2317-7322 • Year 8 • Number 11 • November 2017
CONSTRUCTION INDUSTRY SURVEY Entrepreneurs are optimistic about 2018 Business expectations are positive and point to an increase in the construction industry in coming months. In December, all expectation indicators consolidated their recovery and exceeded the 50-point dividing line. The Business Confidence Index (ICEI) reinforces the optimism among entrepreneurs as it reached its highest points since 2013: 56.7 points. The expectation component was the main responsible for this behavior, even though the current
conditions indicator is approaching the 50-point mark, which indicates an end to the deterioration of current business conditions. Under this scenario, investment intentions continued to trend upward and reached 33.8 points in December, its highest point since April 2015. However, it is worth noting that despite the recent positive trend in the indicator, it is still below its historical average of 36.8 points for December.
Expectation indices* ÍDiffusion index (0-100 points)
53.0 52.5 51.9 50.8
Increase 50 Decrease
DEC 2015
FEB 2016
Activity level Number of employees
APR
JUN
AUG
OCT
DEC
New developments and services Dividing line
The index ranges from 0 to 100. Figures above 50 points indicate an expected growth.
FEB 2017
APR
JUN
AUG
Purchases of raw materials
OCT
DEC
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN NOVEMBER 2017
Employment falls at slower pace in November The indicator of number of employees increased from 43.1 points in October to 44.9 points in November. On a year-on-year basis, the index is up by 8.1 points. However, the indicator remains below the 50-point mark, showing a decline in employment – albeit at a slower pace than previously observed. Between October and November, the activity indicator held virtually steady below the 50-point dividing line, indicating a month-over-month drop in activity.
Yet, the indicator is 7.5 points higher than that observed in the same month of 2016, which shows that activity dropped at a lower rate on this comparison basis. •
SIZES
The indicator measuring activity levels in the civil engineering sector reached 50 points in December, indicating that activity levels remained stable on a month-over-month basis for the first time since September 2013.
Index of number of employees* Diffusion index (0-100 points)
Increase
50
Decrease
45.8
45.2
44.9 43.1
42.1 41.8 42.6 41.7 42.3 38.4 38.9 36.8 36.0 NOV 2016
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
*The index ranges from 0 to 100. Figures above 50 points indicate an increase in number of employees.
Spare capacity remains high Spare capacity in the construction industry remains at a high level, although it has improved slightly in recent months. The indicator measuring actual-usual activity levels increased from 34.1 points in October to 34.5 points in November. This is the highest figure since January 2015. Readings below 50 points indicate lower-thanusual activity levels for the month.
2
After increasing gradually in the last four months, the operating capacity utilization rate held steady at 59% in November. The figure is up by three percentage points from that registered in the same month of 2016, but down by four percentage points below the historical average for the month.
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
EXPECTATIONS FOR CONSTRUCTION INDUSTRY IN DECEMBER 2017
Entrepreneurs expect employment and activity levels in construction industry to improve All indicators measuring entrepreneurs’ expectations edged up from November to December. The indicators of expected activity levels and number of employees increased by 2.6 and 1.8 points respectively, reaching 53.0 and 50.8 points in December.
The indicators of new developments and services and of purchases of inputs and raw materials rose by 1.9 and 3.1 points respectively, reaching 51.9 and 52.5 points. All indices point to an expected increase.
Investment intentions remain on upward trend Entrepreneurs are more likely to invest. The indicator measuring investment intentions has grown for the fifth month in a row, up from 30.7
points in November to 33.8 points in December. The index ranges from 0 to 100 points and the higher the figure, the greater the willingness to invest.
Investment intentions index Diffusion index (0-100 points)
45
41.4 40
35
33.8
30
26.3 25
25.9
20 DEC 2014
MAR 2015
JUN
SEP
DEC
MAR 2016
JUN
SEP
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
3
DEC
MAR 2017
JUN
SEP
DEC
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN DECEMBER
Business confidence increases in December The index measuring confidence among construction entrepreneurs continued on the upward trend started in August, reinforcing that entrepreneurs are confident about the coming months. The index rose from 54.4 points in November to 56.7 points in December, the highest level since March 2013. The increase was driven both by the positive outlook for the next six months and by a less negative assessment of current business conditions. The indicators measuring expectations and current conditions increased by 2.7 and 1.4 points respectively, hitting the mark of 60.5 and 49.2 points.
Thermometer for the ICEI – Construction Diffusion index (0-100 points)*
56.7 lack of confidence
confidence
52.7 (historical average)
Historical series Diffusion index (0-100 points)*
58.3 Confidence
56.7
55.7
58.0
Historical average = 52.7 50
44.9 46.3 Lack of confidence
35.0 DEC 2011
JUN 2012
DEC
JUN 2013
DEC
JUN 2014
ICEI - Construction
DEC
JUN 2015
DEC
JUN 2016
DEC
JUN 2017
DEC
Dividing line
* Figures below 50 points indicate a lack of business confidence. The further below 50 points, the greater and more widespread the lack of confidence.
4
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
56
59
59
39.3
46.9
46.8
27.2
34.1
34.5
36.8
43.1
44.9
SMALL
52
54
57
39.5
46.9
47.2
30.1
36.9
39.0
37.6
46.7
45.2
MEDIUM
56
61
61
40.7
47.0
47.8
28.3
34.8
35.9
38.6
44.2
44.6
LARGE
57
59
59
38.4
46.8
46.1
25.5
32.7
32.0
35.5
41.2
44.9
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
CONSTRUCTION
44.2
50.4
53.0
44.7
50.0
51.9
42.3
49.4
52.5
42.6
49.0
50.8
25.9
30.7
33.8
SMALL
44.5
48.2
52.8
45.6
47.8
51.4
42.1
47.5
51.7
42.2
45.9
50.6
25.6
30.7
33.9
MEDIUM
44.9
51.8
53.6
45.7
50.9
50.4
44.8
51.4
52.5
44.8
50.6
51.4
24.5
31.6
31.4
LARGE
43.6
50.4
52.8
43.8
50.2
53.0
41.0
49.0
52.8
41.5
49.2
50.6
26.8
30.2
35.2
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
46.3
54.4
56.7
35.7
47.8
49.2
51.7
57.8
60.5
SMALL
45.3
51.8
55.8
33.3
44.8
48.3
51.3
55.5
59.9
MEDIUM
47.3
55.5
56.4
37.2
48.8
49.1
52.3
59.0
60.0
LARGE
46.1
54.7
57.2
35.7
48.4
49.5
51.6
57.9
61.0
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 positive expectations. 5 The indicator varies in the 0-100 interval. The higher the index, the greater the willingness to invest. 6 The ICEI-Construction varies in the 0-100 interval. Figures above 50 points indicate business confidence. 7 The indicator varies in the 0-100 interval. Figures above 50 points indicate a better situation as compared to the last six months. 8 The indicator varies in the 0-100 interval. Figures above 50 points indicate optimistic expectations for the next six months.
Technical specifications Sample profile: 578 enterprises, including 182 small, 267 medium and 129 large companies. Data collection period: December, 1-13, 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 - Outubro 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 | Team: Diego Rosa Mambrin, Luis Fernando Melo Mendes (CBIC), Roxana Campos and Taryane Carvalho Perne | 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 Entrepreneurs are optimistic about 2018 Business expectations are positive and point to an increase in the construction industry in coming months. In December, all expectation indicators consolidated their recovery and exceeded the 50-point dividing line. The Business Confidence Index (ICEI) reinforces the optimism among entrepreneurs as it reached its highest points since 2013: 56.7 points. The expectation component was the main responsible for this behavior, even though the current
conditions indicator is approaching the 50-point mark, which indicates an end to the deterioration of current business conditions. Under this scenario, investment intentions continued to trend upward and reached 33.8 points in December, its highest point since April 2015. However, it is worth noting that despite the recent positive trend in the indicator, it is still below its historical average of 36.8 points for December.
Expectation indices* ÍDiffusion index (0-100 points)
53.0 52.5 51.9 50.8
Increase 50 Decrease
DEC 2015
FEB 2016
Activity level Number of employees
APR
JUN
AUG
OCT
DEC
New developments and services Dividing line
The index ranges from 0 to 100. Figures above 50 points indicate an expected growth.
FEB 2017
APR
JUN
AUG
Purchases of raw materials
OCT
DEC
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN NOVEMBER 2017
Employment falls at slower pace in November The indicator of number of employees increased from 43.1 points in October to 44.9 points in November. On a year-on-year basis, the index is up by 8.1 points. However, the indicator remains below the 50-point mark, showing a decline in employment – albeit at a slower pace than previously observed. Between October and November, the activity indicator held virtually steady below the 50-point dividing line, indicating a month-over-month drop in activity.
Yet, the indicator is 7.5 points higher than that observed in the same month of 2016, which shows that activity dropped at a lower rate on this comparison basis. •
SIZES
The indicator measuring activity levels in the civil engineering sector reached 50 points in December, indicating that activity levels remained stable on a month-over-month basis for the first time since September 2013.
Index of number of employees* Diffusion index (0-100 points)
Increase
50
Decrease
45.8
45.2
44.9 43.1
42.1 41.8 42.6 41.7 42.3 38.4 38.9 36.8 36.0 NOV 2016
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
*The index ranges from 0 to 100. Figures above 50 points indicate an increase in number of employees.
Spare capacity remains high Spare capacity in the construction industry remains at a high level, although it has improved slightly in recent months. The indicator measuring actual-usual activity levels increased from 34.1 points in October to 34.5 points in November. This is the highest figure since January 2015. Readings below 50 points indicate lower-thanusual activity levels for the month.
2
After increasing gradually in the last four months, the operating capacity utilization rate held steady at 59% in November. The figure is up by three percentage points from that registered in the same month of 2016, but down by four percentage points below the historical average for the month.
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
EXPECTATIONS FOR CONSTRUCTION INDUSTRY IN DECEMBER 2017
Entrepreneurs expect employment and activity levels in construction industry to improve All indicators measuring entrepreneurs’ expectations edged up from November to December. The indicators of expected activity levels and number of employees increased by 2.6 and 1.8 points respectively, reaching 53.0 and 50.8 points in December.
The indicators of new developments and services and of purchases of inputs and raw materials rose by 1.9 and 3.1 points respectively, reaching 51.9 and 52.5 points. All indices point to an expected increase.
Investment intentions remain on upward trend Entrepreneurs are more likely to invest. The indicator measuring investment intentions has grown for the fifth month in a row, up from 30.7
points in November to 33.8 points in December. The index ranges from 0 to 100 points and the higher the figure, the greater the willingness to invest.
Investment intentions index Diffusion index (0-100 points)
45
41.4 40
35
33.8
30
26.3 25
25.9
20 DEC 2014
MAR 2015
JUN
SEP
DEC
MAR 2016
JUN
SEP
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
3
DEC
MAR 2017
JUN
SEP
DEC
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN DECEMBER
Business confidence increases in December The index measuring confidence among construction entrepreneurs continued on the upward trend started in August, reinforcing that entrepreneurs are confident about the coming months. The index rose from 54.4 points in November to 56.7 points in December, the highest level since March 2013. The increase was driven both by the positive outlook for the next six months and by a less negative assessment of current business conditions. The indicators measuring expectations and current conditions increased by 2.7 and 1.4 points respectively, hitting the mark of 60.5 and 49.2 points.
Thermometer for the ICEI – Construction Diffusion index (0-100 points)*
56.7 lack of confidence
confidence
52.7 (historical average)
Historical series Diffusion index (0-100 points)*
58.3 Confidence
56.7
55.7
58.0
Historical average = 52.7 50
44.9 46.3 Lack of confidence
35.0 DEC 2011
JUN 2012
DEC
JUN 2013
DEC
JUN 2014
ICEI - Construction
DEC
JUN 2015
DEC
JUN 2016
DEC
JUN 2017
DEC
Dividing line
* Figures below 50 points indicate a lack of business confidence. The further below 50 points, the greater and more widespread the lack of confidence.
4
Construction industry survey ISSN 2317-7322 • Year 8 • Number 11 • November 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
56
59
59
39.3
46.9
46.8
27.2
34.1
34.5
36.8
43.1
44.9
SMALL
52
54
57
39.5
46.9
47.2
30.1
36.9
39.0
37.6
46.7
45.2
MEDIUM
56
61
61
40.7
47.0
47.8
28.3
34.8
35.9
38.6
44.2
44.6
LARGE
57
59
59
38.4
46.8
46.1
25.5
32.7
32.0
35.5
41.2
44.9
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
CONSTRUCTION
44.2
50.4
53.0
44.7
50.0
51.9
42.3
49.4
52.5
42.6
49.0
50.8
25.9
30.7
33.8
SMALL
44.5
48.2
52.8
45.6
47.8
51.4
42.1
47.5
51.7
42.2
45.9
50.6
25.6
30.7
33.9
MEDIUM
44.9
51.8
53.6
45.7
50.9
50.4
44.8
51.4
52.5
44.8
50.6
51.4
24.5
31.6
31.4
LARGE
43.6
50.4
52.8
43.8
50.2
53.0
41.0
49.0
52.8
41.5
49.2
50.6
26.8
30.2
35.2
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
46.3
54.4
56.7
35.7
47.8
49.2
51.7
57.8
60.5
SMALL
45.3
51.8
55.8
33.3
44.8
48.3
51.3
55.5
59.9
MEDIUM
47.3
55.5
56.4
37.2
48.8
49.1
52.3
59.0
60.0
LARGE
46.1
54.7
57.2
35.7
48.4
49.5
51.6
57.9
61.0
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 positive expectations. 5 The indicator varies in the 0-100 interval. The higher the index, the greater the willingness to invest. 6 The ICEI-Construction varies in the 0-100 interval. Figures above 50 points indicate business confidence. 7 The indicator varies in the 0-100 interval. Figures above 50 points indicate a better situation as compared to the last six months. 8 The indicator varies in the 0-100 interval. Figures above 50 points indicate optimistic expectations for the next six months.
Technical specifications Sample profile: 578 enterprises, including 182 small, 267 medium and 129 large companies. Data collection period: December, 1-13, 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 - Outubro 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 | Team: Diego Rosa Mambrin, Luis Fernando Melo Mendes (CBIC), Roxana Campos and Taryane Carvalho Perne | 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.
