construction industry survey
CNI indicators ISSN 2317-7322 • Year 8 • Number 8 • August 2017
CONSTRUCTION INDUSTRY SURVEY Construction entrepreneurs show optimism The indices measuring expectations among construction entrepreneurs consolidated their recovery as they exceeded the 50-point dividing line in September. Expectations about activity levels, new developments and services, number of employees, and purchases of raw materials are all optimistic for the first time in more than three years. While activity indices have not reached a positive level, they are slowly approaching that mark. In August, the indices of activity levels and number of employees hit their highest levels for the month
since 2014, meaning that activity in the construction industry is falling at a slower pace. Activity remains at a very low level, but the indices measuring operating capacity utilization rates and actual-usual activity levels have been improving, albeit gradually. The broadly positive expectations, coupled with a less negative assessment of current conditions, have also reflected in construction business confidence (ICEI-Construction), which increased by 3.1 points in September 2017 and exceeded its historical average for the first time since February 2014.
Expectations indices Diffusion index (0-100 points)*
52.5 51.3 50.6 50.6
Increase 50 Decrease 46.9 45.5 45.0 44.1
SEP 2016
OCT
Activity level Number of employees
NOV
DEC
JAN 2017
FEB
MAR
APR
New developments and services Dividing line
The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
MAY
JUN
JUL
AUG
Purchases of raw materials
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN AUGUST 2017
Activity gradually declining at slower pace The indices of activity levels in the construction industry stood at 46.7 points in August. Although still below the 50-point mark – which represents a month-over-month decline in activity – two positive aspects deserve special mention. The index has been growing on a month-over-month basis for 16 months now. In addition, the index is at its highest point for August since 2014. This is to say that activity is gradually declining at a slower pace – in August, the indicator experienced its lowest drop for the month in four years.
The index measuring number of employees shows a decline in construction jobs, with the index amounting to 45.8 points in August. Albeit below 50 points, the index is 6.2 points higher than that recorded in August last year. As with activity levels, the index is also at its highest level since 2014 and has been rising steadily year on year since May 2016.
Activity levels in August (2011-2017) Diffusion index (0-100)*
Increase
55.5
50
49.4
48.1
47.0
46.7
Decrease
43.0
41.8
36.2 2010
2011
2012
2013
Activity level
2014
2015
Dividing line
*The index varies in the 0-100 interval. Figures above 50 points indicate an increase in activity levels.
2
2016
2017
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
Activity levels improve slightly The index of actual-usual activity levels shows that construction activity remains at significantly low levels. The index amounted to 33.4 points in August 2017 – a far cry from the 50-point dividing line between below and above usual levels. While the indicator remains at a low level, it grew by 3 points from the previous month and by 5.7 points from August 2016.
The operating capacity utilization rate posted growth of one percentage point, up from 56% to 57% in August. As a result, operating capacity utilization increased once again on a year-overyear basis (also by one percentage point). Despite the increase, however, the operating capacity utilization rate remains at a low level: from 2012 (beginning of the series) to 2014, the indicator for August averaged 68.7%.
Average operating capacity utilization rate Percentage (%)
75
70
65 2012 2013
60
2014
57% Aug/17
2015
55
2016 2017
50 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Index of actual-usual activity levels Diffusion indices (0-100 points)*
Increase
55.0 50
46.4 47.8 41.4 43.5
Decrease
33.4 27.7 27.2 AUG 2010
AUG 2011
AUG 2012
AUG 2013
AUG 2014
AUG 2015
* The index ranges from 0 to 100. Figures above 50 points indicate higher-than-usual activity levels for the month.
3
AUG 2016
AUG 2017
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN SEPTEMBER 2017
Optimistic expectations Construction entrepreneurs’ expectations improved significantly in September. The indices grew by more than two points as compared to August – a growth rate more significant than that observed in recent months. As a result, all indices exceeded
the 50-point mark for the first time since July 2014. Entrepreneurs are now expecting activity levels, purchases of raw materials, number of employees, and new developments and services to increase.
Expectations indices Diffusion indexes (0-100 points)*
Activity levels
New developments and services Increase
Increase
52.5
51,3
49.8
50
46.9
50
45,5
48.6
47,6 Decrease
Decrease
NOV
SEP 2016
JAN 2017
MAR
Activity level
JUL
MAY
NOV
SEP 2016
SEP
Dividing line
JAN 2017
MAR
MAY
New developments and services
Purchases of raw materials
Number of employees
Increase
Increase
JUL
SEP
Dividing line
50,6
50,6 50
50
47,5 48,4
47,8 48,2
44,1
45,0 Decrease
SEP 2016
48,4
Decrease
NOV
JAN 2017
MAR
Purchases of raw materials
MAY
JUL
SEP
SEP 2016
Dividing line
NOV
JAN 2017
MAR
Number of employees
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
4
MAY
JUL
Dividing line
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
Investment intentions remain at low levels Despite increasing for the second consecutive time, the index measuring investment intentions is still at a significantly low level: 29.8 points. Yet, the
index is up as compared to September 2016, when it reached only 26.8 points.
Investment intentions index Diffusion index (0-100 points)*
60
55.9 50
45.0
40
29.8
26.9
30
26.0
20 JAN 2014
MAY
SEP
JAN 2015
MAY
SEP
JAN 2016
MAY
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
5
SEP
JAN 2017
MAY
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN SEPTEMBER
Entrepreneurs show confidence Confidence among construction entrepreneurs (ICEI-Construction) rose by 3.1 points in September 2017 to 53.4 points. This result caused the index to drift away from the 50-point dividing line, indicating business confidence. The index has also exceeded its 52.7-point historical average for the first time since February 2014. The increase in the index is explained by a less negative assessment of current business conditions and by an increase in optimism about the future. While the index measuring current conditions in the construction industry remains below 50 points, it edged up by 3.0 points to 46.1 points. The index of construction expectations also grew by 3.0 points to 57.0 points.
ICEI Thermometer - Construction Diffusion index (0-100 points)*
53.4 lack or confidence
confidence
52.7 (historical average)
Historical series
Diffusion index (0-100 points)*
57.9
Confidence
53.4
57.4
Historical average = 52.7
50
53.3
51.0 47.5
Lack of confidence
37.3
SEP 2011
MAR 2012
SEP
MAR 2013
SEP
MAR 2014
SEP
ICEI - Construction
MAR 2015
SEP
MAR 2016
SEP
MAR 2017
SEP
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 8 • August 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
56
56
57
41.8
44.3
46.7
27.7
30.4
33.4
39.6
42.6
45.8
SMALL
53
53
52
41.9
46.3
47.2
31.8
35.2
35.8
41.8
44.1
46.5
MEDIUM
57
57
59
44.4
45.2
46.6
28.9
31.8
32.9
40.5
42.0
45.4
LARGE
56
57
58
40.3
43.0
46.5
25.5
27.8
32.8
38.2
42.4
45.7
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
CONSTRUCTION
46.9
49.8
52.5
45.5
48.4
51.3
45.0
48.4
50.6
44.1
48.2
50.6
26.9
29.1
29.8
SMALL
50.3
51.7
51.5
47.8
50.3
50.3
46.8
51.1
49.3
46.3
48.4
48.6
28.3
32.9
29.8
MEDIUM
48.5
50.0
50.7
46.7
47.9
49.7
47.4
47.8
48.1
46.6
48.0
48.7
27.9
27.9
28.2
LARGE
44.8
49.0
53.9
44.0
47.9
52.6
42.9
47.7
52.6
41.8
48.2
52.4
25.9
28.4
30.7
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
51.0
50.3
53.4
39.7
43.1
46.1
56.8
54.0
57.0
SMALL
51.8
50.1
54.1
39.2
41.7
46.7
58.6
54.6
57.8
MEDIUM
52.1
50.5
53.4
40.8
42.9
45.6
57.9
54.2
57.2
LARGE
50.1
50.3
53.2
39.2
43.8
46.2
55.5
53.6
56.6
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: 590 enterprises, including 187 small, 275 medium and 128 large companies. Data collection period: September, 1-15, 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 - August 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: Flavia Coelho Branco Junqueira Ferraz, 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 Construction entrepreneurs show optimism The indices measuring expectations among construction entrepreneurs consolidated their recovery as they exceeded the 50-point dividing line in September. Expectations about activity levels, new developments and services, number of employees, and purchases of raw materials are all optimistic for the first time in more than three years. While activity indices have not reached a positive level, they are slowly approaching that mark. In August, the indices of activity levels and number of employees hit their highest levels for the month
since 2014, meaning that activity in the construction industry is falling at a slower pace. Activity remains at a very low level, but the indices measuring operating capacity utilization rates and actual-usual activity levels have been improving, albeit gradually. The broadly positive expectations, coupled with a less negative assessment of current conditions, have also reflected in construction business confidence (ICEI-Construction), which increased by 3.1 points in September 2017 and exceeded its historical average for the first time since February 2014.
Expectations indices Diffusion index (0-100 points)*
52.5 51.3 50.6 50.6
Increase 50 Decrease 46.9 45.5 45.0 44.1
SEP 2016
OCT
Activity level Number of employees
NOV
DEC
JAN 2017
FEB
MAR
APR
New developments and services Dividing line
The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
MAY
JUN
JUL
AUG
Purchases of raw materials
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN AUGUST 2017
Activity gradually declining at slower pace The indices of activity levels in the construction industry stood at 46.7 points in August. Although still below the 50-point mark – which represents a month-over-month decline in activity – two positive aspects deserve special mention. The index has been growing on a month-over-month basis for 16 months now. In addition, the index is at its highest point for August since 2014. This is to say that activity is gradually declining at a slower pace – in August, the indicator experienced its lowest drop for the month in four years.
The index measuring number of employees shows a decline in construction jobs, with the index amounting to 45.8 points in August. Albeit below 50 points, the index is 6.2 points higher than that recorded in August last year. As with activity levels, the index is also at its highest level since 2014 and has been rising steadily year on year since May 2016.
Activity levels in August (2011-2017) Diffusion index (0-100)*
Increase
55.5
50
49.4
48.1
47.0
46.7
Decrease
43.0
41.8
36.2 2010
2011
2012
2013
Activity level
2014
2015
Dividing line
*The index varies in the 0-100 interval. Figures above 50 points indicate an increase in activity levels.
2
2016
2017
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
Activity levels improve slightly The index of actual-usual activity levels shows that construction activity remains at significantly low levels. The index amounted to 33.4 points in August 2017 – a far cry from the 50-point dividing line between below and above usual levels. While the indicator remains at a low level, it grew by 3 points from the previous month and by 5.7 points from August 2016.
The operating capacity utilization rate posted growth of one percentage point, up from 56% to 57% in August. As a result, operating capacity utilization increased once again on a year-overyear basis (also by one percentage point). Despite the increase, however, the operating capacity utilization rate remains at a low level: from 2012 (beginning of the series) to 2014, the indicator for August averaged 68.7%.
Average operating capacity utilization rate Percentage (%)
75
70
65 2012 2013
60
2014
57% Aug/17
2015
55
2016 2017
50 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Index of actual-usual activity levels Diffusion indices (0-100 points)*
Increase
55.0 50
46.4 47.8 41.4 43.5
Decrease
33.4 27.7 27.2 AUG 2010
AUG 2011
AUG 2012
AUG 2013
AUG 2014
AUG 2015
* The index ranges from 0 to 100. Figures above 50 points indicate higher-than-usual activity levels for the month.
3
AUG 2016
AUG 2017
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN SEPTEMBER 2017
Optimistic expectations Construction entrepreneurs’ expectations improved significantly in September. The indices grew by more than two points as compared to August – a growth rate more significant than that observed in recent months. As a result, all indices exceeded
the 50-point mark for the first time since July 2014. Entrepreneurs are now expecting activity levels, purchases of raw materials, number of employees, and new developments and services to increase.
Expectations indices Diffusion indexes (0-100 points)*
Activity levels
New developments and services Increase
Increase
52.5
51,3
49.8
50
46.9
50
45,5
48.6
47,6 Decrease
Decrease
NOV
SEP 2016
JAN 2017
MAR
Activity level
JUL
MAY
NOV
SEP 2016
SEP
Dividing line
JAN 2017
MAR
MAY
New developments and services
Purchases of raw materials
Number of employees
Increase
Increase
JUL
SEP
Dividing line
50,6
50,6 50
50
47,5 48,4
47,8 48,2
44,1
45,0 Decrease
SEP 2016
48,4
Decrease
NOV
JAN 2017
MAR
Purchases of raw materials
MAY
JUL
SEP
SEP 2016
Dividing line
NOV
JAN 2017
MAR
Number of employees
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
4
MAY
JUL
Dividing line
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
Investment intentions remain at low levels Despite increasing for the second consecutive time, the index measuring investment intentions is still at a significantly low level: 29.8 points. Yet, the
index is up as compared to September 2016, when it reached only 26.8 points.
Investment intentions index Diffusion index (0-100 points)*
60
55.9 50
45.0
40
29.8
26.9
30
26.0
20 JAN 2014
MAY
SEP
JAN 2015
MAY
SEP
JAN 2016
MAY
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
5
SEP
JAN 2017
MAY
SEP
Construction industry survey ISSN 2317-7322 • Year 8 • Number 8 • August 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN SEPTEMBER
Entrepreneurs show confidence Confidence among construction entrepreneurs (ICEI-Construction) rose by 3.1 points in September 2017 to 53.4 points. This result caused the index to drift away from the 50-point dividing line, indicating business confidence. The index has also exceeded its 52.7-point historical average for the first time since February 2014. The increase in the index is explained by a less negative assessment of current business conditions and by an increase in optimism about the future. While the index measuring current conditions in the construction industry remains below 50 points, it edged up by 3.0 points to 46.1 points. The index of construction expectations also grew by 3.0 points to 57.0 points.
ICEI Thermometer - Construction Diffusion index (0-100 points)*
53.4 lack or confidence
confidence
52.7 (historical average)
Historical series
Diffusion index (0-100 points)*
57.9
Confidence
53.4
57.4
Historical average = 52.7
50
53.3
51.0 47.5
Lack of confidence
37.3
SEP 2011
MAR 2012
SEP
MAR 2013
SEP
MAR 2014
SEP
ICEI - Construction
MAR 2015
SEP
MAR 2016
SEP
MAR 2017
SEP
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 8 • August 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
Aug/16
Jul/17
Aug/17
56
56
57
41.8
44.3
46.7
27.7
30.4
33.4
39.6
42.6
45.8
SMALL
53
53
52
41.9
46.3
47.2
31.8
35.2
35.8
41.8
44.1
46.5
MEDIUM
57
57
59
44.4
45.2
46.6
28.9
31.8
32.9
40.5
42.0
45.4
LARGE
56
57
58
40.3
43.0
46.5
25.5
27.8
32.8
38.2
42.4
45.7
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
CONSTRUCTION
46.9
49.8
52.5
45.5
48.4
51.3
45.0
48.4
50.6
44.1
48.2
50.6
26.9
29.1
29.8
SMALL
50.3
51.7
51.5
47.8
50.3
50.3
46.8
51.1
49.3
46.3
48.4
48.6
28.3
32.9
29.8
MEDIUM
48.5
50.0
50.7
46.7
47.9
49.7
47.4
47.8
48.1
46.6
48.0
48.7
27.9
27.9
28.2
LARGE
44.8
49.0
53.9
44.0
47.9
52.6
42.9
47.7
52.6
41.8
48.2
52.4
25.9
28.4
30.7
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
Sep/16
Aug/17
Sep/17
51.0
50.3
53.4
39.7
43.1
46.1
56.8
54.0
57.0
SMALL
51.8
50.1
54.1
39.2
41.7
46.7
58.6
54.6
57.8
MEDIUM
52.1
50.5
53.4
40.8
42.9
45.6
57.9
54.2
57.2
LARGE
50.1
50.3
53.2
39.2
43.8
46.2
55.5
53.6
56.6
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: 590 enterprises, including 187 small, 275 medium and 128 large companies. Data collection period: September, 1-15, 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 - August 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: Flavia Coelho Branco Junqueira Ferraz, 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.
