construction industry survey
CNI indicators ISSN 2317-7322 • Year 8 • Number 12 • December 2017
CONSTRUCTION INDUSTRY SURVEY Entrepreneurs start the year on a more optimistic note The expectation indicators consolidated their upward trend in January and point to a more optimistic outlook for the construction industry. The business confidence indicator reinforces this scenario as it reached its highest point since February 2013. The quarterly indices indicate an improvement in financial conditions, with entrepreneurs showing less dissatisfaction with their profit margins and financial situation. Among the main problems indicated by companies are a high tax
burden, insufficient domestic demand, and lack of working capital. The activity indicators experienced a decline in December on a month-over-month basis. The frequent rainfalls in December have a direct impact on the sector’s production, which generally leads to more negative results in the month. However, it is worth noting that the decline in activity and employment levels at the end of 2017 was less pronounced than in recent years.
Expectation indices* Diffusion indices (0-100)
56.2 55.7 55.0 54.0
Increase 50 Decrease
JAN 2016
MAY
Activity levels Number of employees
SEP
JAN 2017
MAY
New developments and services Dividing line
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected growth.
SEP
JAN 2018
Purchase of inputs and raw materials
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN DECEMBER 2017
Construction industry closes 2017 with a lower decline than in 2016 The indicators measuring activity levels and number of employees amounted respectively to 44.9 to 43.0 points, down by 1.9 points in December as compared to November. Despite the
decline, which is usually expected in December, the indices reached an all-time high for the month since 2013 and 2014 respectively, indicating that both activity levels and jobs fell at a slower pace.
Activity level index* Diffusion index (0-100 points)
Increase
50
Decrease
46.7 44.5
46.9
46.8 44.9
44.3
44.1 43.3
46.4
42.8
40.3 39.3 37.9 DEC JAN 2016 2017
FEB
MAR
APR
MAY
JUN
Activity levels
JUL
AUG
SEP
OCT
NOV
DEC
Dividing line
*The index ranges from 0 to 100 points. Figures above 50 points indicate an increase in activity levels.
Increased spare capacity in December The indicator measuring actual-usual activity levels dropped from 34.5 points in November to 33.4 points in December. Readings below 50 points indicate that activity is below usual levels for the month.
2
The operating capacity utilization rate reached 58% in December, down by one percentage point from November and by four percentage points from the historical average for the month. However, the indicator is two percentage points higher than the figure recorded in December 2016.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
FINANCIAL CONDITIONS OF CONSTRUCTION INDUSTRY IN THE FOURTH QUARTER OF 2017
Entrepreneur are less dissatisfied with their companies’ financial situation The financial condition indicators recorded a third consecutive increase. Yet, they still remain below the 50-point dividing line, indicating that entrepreneurs are less dissatisfied with their profit margins and financial situation. The index measuring satisfaction with profit margins edged up from 34.4 to 37.0 points between the third and fourth quarters. On the same comparison basis, the index of satisfaction with financial situation grew from 39.1 points to 39.9 points.
Satisfaction with profit margins and financial situation* Diffusion index (0-100 points)
Satisfaction 50 Insatisfaction
41.4
39.9 36.4
36.0 37.0
38.5 32.2
Q4 2014
Q2 2015
Q4 2015
31.7
Q2 2016
Q4 2016
Q2 2017
Q4 2017
Profit margins in the quarter Financial situation in the quarter Dividing line *The indices range from 0 to 100 points. Figures below 50 points indicate dissatisfaction with profit margins and/or financial conditions.
Improvement in access to credit for businesses The indicator of ease of access to credit posted a fourth consecutive growth in the fourth quarter and reached 30.7 points, up by 0.9 points from the figure observed in the previous quarter. The increase indicates that companies are facing fewer difficulties in accessing credit. The indicator ranges from 0 to 100, with readings below 50 points indicating difficulties to access credit.
Ease of access to credit* Diffusion index (0-100 points)
Easy 50 Difficult
30.7 28.5 29.8
Q4 2014
Q2 2015
Q4 2015
Q2 2016
Access to credit in the quarter
Q4 2016
Q2 2017
Dividing line
*The indicators range from 0 to 100. Figures above 50 points indicate easier access to credit.
3
Q4 2017
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
PROBLEMS FACED BY THE CONSTRUCTION INDUSTRY IN THE FOURTH QUARTER OF 2017
High tax burden is number one problem faced by construction industry The issue of high tax burden continued to rank first among major problems faced by the construction industry. The item was indicated by 37.8% of entrepreneurs in the fourth quarter, up from 32.3% in the third quarter.
Main problems faced by the construction industry in the quarter (%)* Percentage (%)
37.8
High interest rates
Coming next are the problems of insufficient internal demand and lack of working capital. The percentage of companies indicating these two issues held virtually steady between the third and fourth quarters, standing at 29.8% and 27.4% respectively.
32.3 29.8 30.6
Insufficient domestic demand Lack of working capital
27,4 27.7
Client delinquency
25.8 27.2 23.9 22.8
High tax burden
22.6 21.3
Excessive red tape 12.6 14.5
Lack of long-term funding
11,9 12.3
Legal uncertainty Unfair competition (informality, smuggling, etc.)
9.8 13.9
Lack or high cost of raw materials
7.4 5.3
Lack or high cost of skilled labor
6.3 5.9
Environmental licensing
6.1 7.1
Lack or high cost of unskilled labor
4.1 3.8
Weather conditions
3.0 3.1
Difficulties in transportation logistics (roads, etc.)
2.4 1.6
Lack or high cost of energy
2.3 2.4
Availability of land
1.4 0.8
Lack or high cost of support equipment
0.9 0.9
Others None
5.5 8.2
Q4 2017 Q3 2017
9.1 9.3
* 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 12 • December 2017
EXPECTATIONS FOR CONSTRUCTION INDUSTRY IN JANUARY 2018
Positive outlook for construction industry The expectation indicators are up for the second month in a row, consolidating their position above the dividing line between an expected increase and decline. The indicators of expected activity levels and of expected new developments and services rose respectively by
3.2 and 3.8 points, hitting the mark of 56.2 and 55.7 points in January. The indicators measuring expected purchases of inputs and raw materials and of expected number of employees dropped by 2.5 and 3.2 points respectively to 55.0 and 54.0 points.
Expectation indices* Diffusion indices (0-100 points)
Activity level
New developments and services 56.2
55.7
Increase
Increase 51.9 53.0
50
50
50.4
50.0
47.4
46.6 Decrease
Decrease
JAN 2017
MAR
MAY
JUL
SEP
NOV
JAN 2018
JAN 2017
Expected activity level Dividing line
MAR
MAY
JUL
SEP
NOV
JAN 2018
Expected develompents and services Dividing line
Purchases of raw materials
Number of employees
55.0
Increase
Increase
54.0
52.5 50.8
50
50
49.4 Decrease
49.0 Decrease 45.7
45.4
JAN 2017
MAR
MAY
JUL
SEP
NOV
JAN 2017
JAN 2018
Expected purchases of raw materials Dividing line
MAR
MAY
JUL
Expected number of employees Dividing line
*The expectation indices range from 0 to 100 points. Figures below 50 points indicate an expected decline.
5
SEP
NOV
JAN 2018
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
January sees decline in investment intentions The investment intentions index reversed part of the increase observed in December and fell by 1.7 points to 32.1 points in January. Compared with the same month of 2017, the index is up by 4.4
points. The index ranges from 0 to 100 and the higher the reading, the greater the willingness to invest.
Investment intentions index* Diffusion index (0-100 points)
45 40.8 40 35 30
32.1
27.7
25 25,.0 JAN 2015
JUL
JAN 2016
JUL
JAN 2017
*The index ranges from 0 to 100. The higher the index, the greater the willingness to invest.
6
JUL
JAN 2018
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN JANUARY
Business confidence remains on the rise The index measuring confidence among construction entrepreneurs continued on the upward trend started in August – a further sign of business confidence. The ICEI-Construction index rose from 56.7 points in December 2017 to 57.2 points in January 2018. This increase was led by an improvement in the expectations indicator, which edged up from 60.5 points to 61.4 points between December and January, standing significantly above the 50-point dividing line between pessimism and optimism. The indicator measuring current conditions remained practically stable at 49.1 points – below the 50-point mark, indicating that current conditions have worsened. This is to say that construction entrepreneurs are optimistic about the future, but have not yet noticed an improvement in the current situation of their businesses.
Thermometer for the ICEI - Construction Index (0-100 points)
57.2 lack of confidence
confidence
52.8 (historical average)
Historical series* Diffusion indices (0-100)
60.2 58.3
Confidence
57.2 55.0 Historical average = 52.8
50
44.6
48.2
Lack of confidence
35.1 JAN 2012
JUL
JAN 2013
JUL
JAN 2014
JUL
ICEI - Construction
JAN 2015
JUL
JAN 2016
JUL
JAN 2017
JUL
JAN 2018
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.
7
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
RESULTS BY COMPANY SIZE Construction industry performance OPERATION CAPACITY UTILIZATION (%) 1
ACTUAL-USUAL ACTIVITY LEVEL3
ACTIVITY LEVEL 2
NUMBER OF EMPLOYEES2
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
56
59
58
37.9
46.8
44.9
27.5
34.5
33.4
36.0
44.9
43.0
SMALL
51
57
53
37.5
47.2
44.5
30.8
39.0
37.5
35.1
45.2
44.9
MEDIUM
55
61
57
38.0
47.8
43.6
28.8
35.9
33.9
37.4
44.6
43.5
LARGE
59
59
60
37.9
46.1
45.7
25.6
32.0
31.7
35.5
44.9
42.0
CONSTRUCTION
Financial conditions in the quarter SATISFACTION WITH PROFITS 4
AVERAGE PRICES OF RAW MATERIALS EVOLUTION 2
SATISFACTION WITH FINANCIAL SITUATION 4
EASE TO ACCESS CREDIT 5
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
31.7
34.4
37.0
53.4
57.1
57.6
36.0
39.1
39.9
25.0
29.8
30.7
SMALL
32.5
35.8
36.0
54.3
55.3
54.7
34.5
38.7
39.3
26.3
31.5
29.3
MEDIUM
32.5
34.5
37.2
54.5
55.3
57.1
37.9
39.0
40.2
26.5
29.3
33.5
LARGE
31.0
33.8
37.2
52.4
58.8
59.0
35.4
39.4
40.0
23.7
29.4
29.7
CONSTRUCTION
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
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
47.4
53.0
56.2
46.6
51.9
55.7
45.4
52.5
55.0
45.7
50.8
54.0
27.7
33.8
32.1
SMALL
47.7
52.8
54.8
46.1
51.4
53.3
45.5
51.7
52.8
45.5
50.6
51.1
28.3
33.9
32.7
MEDIUM
47.0
53.6
54.4
48.1
50.4
53.3
46.4
52.5
53.4
46.5
51.4
52.7
27.8
31.4
31.2
LARGE
47.5
52.8
57.7
46.0
53.0
57.9
44.7
52.8
56.8
45.4
50.6
55.8
27.4
35.2
32.4
CONSTRUCTION
Construction Business Confidence Index (ICEI - Construction) and its components ICEI - CONSTRUCTION8
CURRENT CONDITIONS9
EXPECTATIONS10
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
48.2
56.7
57.2
35.7
49.2
49.1
54.6
60.5
61.4
SMALL
46.7
55.8
54.8
35.3
48.3
46.2
52.4
59.9
59.6
MEDIUM
48.7
56.4
56.5
37.6
49.1
48.7
54.4
60.0
60.3
LARGE
48.4
57.2
58.5
34.7
49.5
50.4
55.6
61.0
62.6
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 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.
8
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
Main problems CONSTRUCTION
Q3-17 ITEMS
%
SMALL
Q4-17 %
Q3-17
Ranking
%
MEDIUM
Q4-17 %
Q3-17
Ranking
%
LARGE
Q4-17 %
Q3-17
Ranking
%
Q4-17 %
Ranking
High tax burden
32,3% 37,8%
1
39,8% 40,2%
1
33,6% 37,9%
1
26,2% 36,5%
2
Insufficient domestic demand
30,6% 29,8%
2
26,9% 22,6%
4
29,4% 26,7%
3
34,4% 37,4%
1
Lack of working capital
27,7%
27,4%
3
24,4% 26,2%
2
27,3% 24,6%
4
30,3% 31,3%
3
Client delinquency
27,2% 25,8%
4
23,4% 21,3%
6
27,3% 28,4%
2
29,5% 25,2%
5
High interest rates
22,8% 23,9%
5
25,9% 22,0%
5
21,3% 22,8%
5
23,0% 26,1%
4
Excessive red tape
21,3% 22,6%
6
23,9% 23,2%
3
22,7% 22,4%
6
18,0% 22,6%
6
Lack of long-term funding
14,5% 12,6%
7
10,4% 12,8%
9
14,3%
9,9%
8
17,2% 15,7%
7
Legal uncertainty
12,3% 11,9%
8
11,4%
7,9%
11
10,8% 11,2%
7
14,8% 14,8%
8
Unfair competition (informality, smuggling, etc.)
13,9%
9,8%
9
20,4% 18,3%
7
12,2%
9,9%
8
12,3%
5,2%
13
None
9,3%
9,1%
10
8,5%
14,0%
8
8,0%
9,5%
10
11,5%
6,1%
11
Lack or high cost of raw materials
5,3%
7,4%
11
5,0%
8,5%
10
6,3%
7,3%
11
4,1%
7,0%
9
Lack or high cost of skilled workers
5,9%
6,3%
12
8,0%
6,1%
12
5,6%
7,3%
11
4,9%
5,2%
13
Environmental licensing
7,1%
6,1%
13
5,0%
6,1%
12
6,6%
6,0%
13
9,0%
6,1%
11
Others
8,2%
5,5%
14
5,5%
2,4%
17
9,4%
5,6%
14
8,2%
7,0%
9
Lack or high cost of unskilled workers
3,8%
4,1%
15
6,0%
2,4%
17
3,8%
3,9%
16
2,5%
5,2%
13
Weather conditions
3,1%
3,0%
16
3,0%
4,3%
14
4,2%
4,3%
15
1,6%
0,9%
18
Difficulties in transportation logistics (roads, etc.)
1,6%
2,4%
17
1,5%
3,0%
16
1,0%
3,4%
17
2,5%
0,9%
18
Lack or high cost of energy
2,4%
2,3%
18
1,5%
3,7%
15
2,1%
1,3%
19
3,3%
2,6%
16
Availability of land
0,8%
1,4%
19
1,0%
1,2%
19
1,4%
1,3%
19
0,0%
1,7%
17
Lack or high cos of support equipment
0,9%
0,9%
20
1,0%
0,0%
20
1,0%
2,2%
18
0,8%
0,0%
20
Technical specifications Sample profile:528 enterprises, including 173 small, 238 medium and 117 large. Data collection period: January 3-16, 2018.
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 - Dezembro/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 Entrepreneurs start the year on a more optimistic note The expectation indicators consolidated their upward trend in January and point to a more optimistic outlook for the construction industry. The business confidence indicator reinforces this scenario as it reached its highest point since February 2013. The quarterly indices indicate an improvement in financial conditions, with entrepreneurs showing less dissatisfaction with their profit margins and financial situation. Among the main problems indicated by companies are a high tax
burden, insufficient domestic demand, and lack of working capital. The activity indicators experienced a decline in December on a month-over-month basis. The frequent rainfalls in December have a direct impact on the sector’s production, which generally leads to more negative results in the month. However, it is worth noting that the decline in activity and employment levels at the end of 2017 was less pronounced than in recent years.
Expectation indices* Diffusion indices (0-100)
56.2 55.7 55.0 54.0
Increase 50 Decrease
JAN 2016
MAY
Activity levels Number of employees
SEP
JAN 2017
MAY
New developments and services Dividing line
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected growth.
SEP
JAN 2018
Purchase of inputs and raw materials
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN DECEMBER 2017
Construction industry closes 2017 with a lower decline than in 2016 The indicators measuring activity levels and number of employees amounted respectively to 44.9 to 43.0 points, down by 1.9 points in December as compared to November. Despite the
decline, which is usually expected in December, the indices reached an all-time high for the month since 2013 and 2014 respectively, indicating that both activity levels and jobs fell at a slower pace.
Activity level index* Diffusion index (0-100 points)
Increase
50
Decrease
46.7 44.5
46.9
46.8 44.9
44.3
44.1 43.3
46.4
42.8
40.3 39.3 37.9 DEC JAN 2016 2017
FEB
MAR
APR
MAY
JUN
Activity levels
JUL
AUG
SEP
OCT
NOV
DEC
Dividing line
*The index ranges from 0 to 100 points. Figures above 50 points indicate an increase in activity levels.
Increased spare capacity in December The indicator measuring actual-usual activity levels dropped from 34.5 points in November to 33.4 points in December. Readings below 50 points indicate that activity is below usual levels for the month.
2
The operating capacity utilization rate reached 58% in December, down by one percentage point from November and by four percentage points from the historical average for the month. However, the indicator is two percentage points higher than the figure recorded in December 2016.
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
FINANCIAL CONDITIONS OF CONSTRUCTION INDUSTRY IN THE FOURTH QUARTER OF 2017
Entrepreneur are less dissatisfied with their companies’ financial situation The financial condition indicators recorded a third consecutive increase. Yet, they still remain below the 50-point dividing line, indicating that entrepreneurs are less dissatisfied with their profit margins and financial situation. The index measuring satisfaction with profit margins edged up from 34.4 to 37.0 points between the third and fourth quarters. On the same comparison basis, the index of satisfaction with financial situation grew from 39.1 points to 39.9 points.
Satisfaction with profit margins and financial situation* Diffusion index (0-100 points)
Satisfaction 50 Insatisfaction
41.4
39.9 36.4
36.0 37.0
38.5 32.2
Q4 2014
Q2 2015
Q4 2015
31.7
Q2 2016
Q4 2016
Q2 2017
Q4 2017
Profit margins in the quarter Financial situation in the quarter Dividing line *The indices range from 0 to 100 points. Figures below 50 points indicate dissatisfaction with profit margins and/or financial conditions.
Improvement in access to credit for businesses The indicator of ease of access to credit posted a fourth consecutive growth in the fourth quarter and reached 30.7 points, up by 0.9 points from the figure observed in the previous quarter. The increase indicates that companies are facing fewer difficulties in accessing credit. The indicator ranges from 0 to 100, with readings below 50 points indicating difficulties to access credit.
Ease of access to credit* Diffusion index (0-100 points)
Easy 50 Difficult
30.7 28.5 29.8
Q4 2014
Q2 2015
Q4 2015
Q2 2016
Access to credit in the quarter
Q4 2016
Q2 2017
Dividing line
*The indicators range from 0 to 100. Figures above 50 points indicate easier access to credit.
3
Q4 2017
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
PROBLEMS FACED BY THE CONSTRUCTION INDUSTRY IN THE FOURTH QUARTER OF 2017
High tax burden is number one problem faced by construction industry The issue of high tax burden continued to rank first among major problems faced by the construction industry. The item was indicated by 37.8% of entrepreneurs in the fourth quarter, up from 32.3% in the third quarter.
Main problems faced by the construction industry in the quarter (%)* Percentage (%)
37.8
High interest rates
Coming next are the problems of insufficient internal demand and lack of working capital. The percentage of companies indicating these two issues held virtually steady between the third and fourth quarters, standing at 29.8% and 27.4% respectively.
32.3 29.8 30.6
Insufficient domestic demand Lack of working capital
27,4 27.7
Client delinquency
25.8 27.2 23.9 22.8
High tax burden
22.6 21.3
Excessive red tape 12.6 14.5
Lack of long-term funding
11,9 12.3
Legal uncertainty Unfair competition (informality, smuggling, etc.)
9.8 13.9
Lack or high cost of raw materials
7.4 5.3
Lack or high cost of skilled labor
6.3 5.9
Environmental licensing
6.1 7.1
Lack or high cost of unskilled labor
4.1 3.8
Weather conditions
3.0 3.1
Difficulties in transportation logistics (roads, etc.)
2.4 1.6
Lack or high cost of energy
2.3 2.4
Availability of land
1.4 0.8
Lack or high cost of support equipment
0.9 0.9
Others None
5.5 8.2
Q4 2017 Q3 2017
9.1 9.3
* 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 12 • December 2017
EXPECTATIONS FOR CONSTRUCTION INDUSTRY IN JANUARY 2018
Positive outlook for construction industry The expectation indicators are up for the second month in a row, consolidating their position above the dividing line between an expected increase and decline. The indicators of expected activity levels and of expected new developments and services rose respectively by
3.2 and 3.8 points, hitting the mark of 56.2 and 55.7 points in January. The indicators measuring expected purchases of inputs and raw materials and of expected number of employees dropped by 2.5 and 3.2 points respectively to 55.0 and 54.0 points.
Expectation indices* Diffusion indices (0-100 points)
Activity level
New developments and services 56.2
55.7
Increase
Increase 51.9 53.0
50
50
50.4
50.0
47.4
46.6 Decrease
Decrease
JAN 2017
MAR
MAY
JUL
SEP
NOV
JAN 2018
JAN 2017
Expected activity level Dividing line
MAR
MAY
JUL
SEP
NOV
JAN 2018
Expected develompents and services Dividing line
Purchases of raw materials
Number of employees
55.0
Increase
Increase
54.0
52.5 50.8
50
50
49.4 Decrease
49.0 Decrease 45.7
45.4
JAN 2017
MAR
MAY
JUL
SEP
NOV
JAN 2017
JAN 2018
Expected purchases of raw materials Dividing line
MAR
MAY
JUL
Expected number of employees Dividing line
*The expectation indices range from 0 to 100 points. Figures below 50 points indicate an expected decline.
5
SEP
NOV
JAN 2018
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
January sees decline in investment intentions The investment intentions index reversed part of the increase observed in December and fell by 1.7 points to 32.1 points in January. Compared with the same month of 2017, the index is up by 4.4
points. The index ranges from 0 to 100 and the higher the reading, the greater the willingness to invest.
Investment intentions index* Diffusion index (0-100 points)
45 40.8 40 35 30
32.1
27.7
25 25,.0 JAN 2015
JUL
JAN 2016
JUL
JAN 2017
*The index ranges from 0 to 100. The higher the index, the greater the willingness to invest.
6
JUL
JAN 2018
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN JANUARY
Business confidence remains on the rise The index measuring confidence among construction entrepreneurs continued on the upward trend started in August – a further sign of business confidence. The ICEI-Construction index rose from 56.7 points in December 2017 to 57.2 points in January 2018. This increase was led by an improvement in the expectations indicator, which edged up from 60.5 points to 61.4 points between December and January, standing significantly above the 50-point dividing line between pessimism and optimism. The indicator measuring current conditions remained practically stable at 49.1 points – below the 50-point mark, indicating that current conditions have worsened. This is to say that construction entrepreneurs are optimistic about the future, but have not yet noticed an improvement in the current situation of their businesses.
Thermometer for the ICEI - Construction Index (0-100 points)
57.2 lack of confidence
confidence
52.8 (historical average)
Historical series* Diffusion indices (0-100)
60.2 58.3
Confidence
57.2 55.0 Historical average = 52.8
50
44.6
48.2
Lack of confidence
35.1 JAN 2012
JUL
JAN 2013
JUL
JAN 2014
JUL
ICEI - Construction
JAN 2015
JUL
JAN 2016
JUL
JAN 2017
JUL
JAN 2018
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.
7
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
RESULTS BY COMPANY SIZE Construction industry performance OPERATION CAPACITY UTILIZATION (%) 1
ACTUAL-USUAL ACTIVITY LEVEL3
ACTIVITY LEVEL 2
NUMBER OF EMPLOYEES2
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
Dec/16
Nov/17
Dec/17
56
59
58
37.9
46.8
44.9
27.5
34.5
33.4
36.0
44.9
43.0
SMALL
51
57
53
37.5
47.2
44.5
30.8
39.0
37.5
35.1
45.2
44.9
MEDIUM
55
61
57
38.0
47.8
43.6
28.8
35.9
33.9
37.4
44.6
43.5
LARGE
59
59
60
37.9
46.1
45.7
25.6
32.0
31.7
35.5
44.9
42.0
CONSTRUCTION
Financial conditions in the quarter SATISFACTION WITH PROFITS 4
AVERAGE PRICES OF RAW MATERIALS EVOLUTION 2
SATISFACTION WITH FINANCIAL SITUATION 4
EASE TO ACCESS CREDIT 5
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
Q4 2016
Q3 2017
Q4 2017
31.7
34.4
37.0
53.4
57.1
57.6
36.0
39.1
39.9
25.0
29.8
30.7
SMALL
32.5
35.8
36.0
54.3
55.3
54.7
34.5
38.7
39.3
26.3
31.5
29.3
MEDIUM
32.5
34.5
37.2
54.5
55.3
57.1
37.9
39.0
40.2
26.5
29.3
33.5
LARGE
31.0
33.8
37.2
52.4
58.8
59.0
35.4
39.4
40.0
23.7
29.4
29.7
CONSTRUCTION
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
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
47.4
53.0
56.2
46.6
51.9
55.7
45.4
52.5
55.0
45.7
50.8
54.0
27.7
33.8
32.1
SMALL
47.7
52.8
54.8
46.1
51.4
53.3
45.5
51.7
52.8
45.5
50.6
51.1
28.3
33.9
32.7
MEDIUM
47.0
53.6
54.4
48.1
50.4
53.3
46.4
52.5
53.4
46.5
51.4
52.7
27.8
31.4
31.2
LARGE
47.5
52.8
57.7
46.0
53.0
57.9
44.7
52.8
56.8
45.4
50.6
55.8
27.4
35.2
32.4
CONSTRUCTION
Construction Business Confidence Index (ICEI - Construction) and its components ICEI - CONSTRUCTION8
CURRENT CONDITIONS9
EXPECTATIONS10
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
Jan/17
Dec/17
Jan/18
48.2
56.7
57.2
35.7
49.2
49.1
54.6
60.5
61.4
SMALL
46.7
55.8
54.8
35.3
48.3
46.2
52.4
59.9
59.6
MEDIUM
48.7
56.4
56.5
37.6
49.1
48.7
54.4
60.0
60.3
LARGE
48.4
57.2
58.5
34.7
49.5
50.4
55.6
61.0
62.6
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 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.
8
Construction Industry Survey ISSN 2317-7322 • Year 8 • Number 12 • December 2017
Main problems CONSTRUCTION
Q3-17 ITEMS
%
SMALL
Q4-17 %
Q3-17
Ranking
%
MEDIUM
Q4-17 %
Q3-17
Ranking
%
LARGE
Q4-17 %
Q3-17
Ranking
%
Q4-17 %
Ranking
High tax burden
32,3% 37,8%
1
39,8% 40,2%
1
33,6% 37,9%
1
26,2% 36,5%
2
Insufficient domestic demand
30,6% 29,8%
2
26,9% 22,6%
4
29,4% 26,7%
3
34,4% 37,4%
1
Lack of working capital
27,7%
27,4%
3
24,4% 26,2%
2
27,3% 24,6%
4
30,3% 31,3%
3
Client delinquency
27,2% 25,8%
4
23,4% 21,3%
6
27,3% 28,4%
2
29,5% 25,2%
5
High interest rates
22,8% 23,9%
5
25,9% 22,0%
5
21,3% 22,8%
5
23,0% 26,1%
4
Excessive red tape
21,3% 22,6%
6
23,9% 23,2%
3
22,7% 22,4%
6
18,0% 22,6%
6
Lack of long-term funding
14,5% 12,6%
7
10,4% 12,8%
9
14,3%
9,9%
8
17,2% 15,7%
7
Legal uncertainty
12,3% 11,9%
8
11,4%
7,9%
11
10,8% 11,2%
7
14,8% 14,8%
8
Unfair competition (informality, smuggling, etc.)
13,9%
9,8%
9
20,4% 18,3%
7
12,2%
9,9%
8
12,3%
5,2%
13
None
9,3%
9,1%
10
8,5%
14,0%
8
8,0%
9,5%
10
11,5%
6,1%
11
Lack or high cost of raw materials
5,3%
7,4%
11
5,0%
8,5%
10
6,3%
7,3%
11
4,1%
7,0%
9
Lack or high cost of skilled workers
5,9%
6,3%
12
8,0%
6,1%
12
5,6%
7,3%
11
4,9%
5,2%
13
Environmental licensing
7,1%
6,1%
13
5,0%
6,1%
12
6,6%
6,0%
13
9,0%
6,1%
11
Others
8,2%
5,5%
14
5,5%
2,4%
17
9,4%
5,6%
14
8,2%
7,0%
9
Lack or high cost of unskilled workers
3,8%
4,1%
15
6,0%
2,4%
17
3,8%
3,9%
16
2,5%
5,2%
13
Weather conditions
3,1%
3,0%
16
3,0%
4,3%
14
4,2%
4,3%
15
1,6%
0,9%
18
Difficulties in transportation logistics (roads, etc.)
1,6%
2,4%
17
1,5%
3,0%
16
1,0%
3,4%
17
2,5%
0,9%
18
Lack or high cost of energy
2,4%
2,3%
18
1,5%
3,7%
15
2,1%
1,3%
19
3,3%
2,6%
16
Availability of land
0,8%
1,4%
19
1,0%
1,2%
19
1,4%
1,3%
19
0,0%
1,7%
17
Lack or high cos of support equipment
0,9%
0,9%
20
1,0%
0,0%
20
1,0%
2,2%
18
0,8%
0,0%
20
Technical specifications Sample profile:528 enterprises, including 173 small, 238 medium and 117 large. Data collection period: January 3-16, 2018.
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 - Dezembro/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.
