construction industry survey AWS
CNI indicators ISSN 2317-7322 • Year 8 • Number 10 • October 2017
CONSTRUCTION INDUSTRY SURVEY Construction industry still struggling Data from the October issue of the Construction Industry Survey reflect the difficulties faced by industry in trying to get on a recovery path. The indicator measuring activity levels remained below the 50-point dividing line, indicating a month-over-month decline in construction activity levels. Meanwhile, the indicator of number of employees, which is also below the dividing line, fell at a faster pace in October. Compared with the same month in 2016, however, both indicators are up respectively by 6.9 and 5.4 points. The indicators of actual-usual activity levels and operating capacity utilization grew in October,
but still show that the construction industry is operating below usual levels and with high spare capacity. At the same time, most expectation indicators point to stability. On the other hand, the index measuring construction business confidence and investment intentions rose for the fourth consecutive month – the former shows that entrepreneurs are more confident and that the indicator is above its historical average, while the latter indicates that investment intentions are on a recovery track, though they remain at very low levels.
Activity index Diffusion index (0-100)*
Increase
50
46.7 46.4 46.9 Decrease
44.5 43.3 40.0
44.3
44.1 42.8
40.3 39.3
39.3 37.9
OCT 2016
NOV
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
*The index varies in the 0-100 interval. Figures above 50 points indicate an increase in activity levels.
JUL
AUG
SEP
OCT
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN OCTOBER 2017
Employment falls at stronger rate in October The indicators measuring industrial performance continue to show a decline in activity and employment levels in the construction industry, albeit at a slower pace than in 2016. The indicator of expected activity levels dropped by 2.1 points, down from 45.2 points in September to 43.1 points in October. Nevertheless, the index is 5.4 points higher than that registered in October 2016.
The activity level indicator recorded growth of 0.5 points, up from 46.4 points in September to 46.9 points in October. Compared with the same month last year, the indicator edged up by 6.9 points. Yet, since the index remains below the 50-point dividing line, it points to a decline in activity. It is worth noting that the further below the 50 points, the more significant and widespread the decline.
Index of number of employees Diffusion index (0-100)*
Increase
50
Decrease
45.8
45.2 43.1
42.1 41.8 42.6 41.7 42.3 38.4 38.9 37.7 36.8 36.0 OCT 2016
NOV
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
* The indicator ranges from 0 to 100 points. Figures above 50 points indicate a month-over-month increase in number of employees.
Idleness keeps declining The operating capacity utilization rate edged up for the fourth month in a row and reached 59% in October, up from 58% in September. The figure, however, is down by 4 percentage points from the historical average for the month.
2
This behavior is not homogeneous across companies of different sizes. Small firms reported a decline in operating capacity utilization (down from 55% in September to 54% in October), as did large businesses (down from 60% in September to 59% in October). Medium companies in turn reported an increase of three percentage points, reaching 61%.
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN NOVEMBER 2017
Entrepreneurs expect activity levels to hold steady With respect to activity levels, the indicator remained virtually on the 50-point mark as it dropped by 1.3 points in November to 50.4 points, suggesting an expected stability over the next six months. The indices of new developments and services and of expected purchases of inputs and raw materials reached 50.0 and 49.4 points respectively, also suggesting that these indicators are expected to hold steady at current levels.
The only indicator that entrepreneurs expect to decline over the next six months is that of expected number of employees, which dropped from 49.8 points in October to 49.0 points in November. The indices vary in the 0-100 interval. Figures below 50 points indicate an expected decline.
Expectations indices Diffusion indexes (0-100 points)*
Activity levels
New developments and services Increase
Increase
52.5
51.3
51.7
50.6
50
50
50.4 45.5
50.0
44.7 Decrease
Decrease
NOV 2016
JAN 2017
MAR
MAY
Activity level
JUL
SEP
NOV 2016
NOV
Dividing line
JAN 2017
MAR
MAY
JUL
New developments and services
Purchases of raw materials
Number of employees
Increase
Increase
SEP
NOV
Dividing line
50.6
50.6 50
50
49.6 49.4
49.8
Decrease
NOV 2016
49.0
44.2
43.9 Decrease
JAN 2017
MAR
MAY
Purchases of raw materials
JUL
SEP
NOV
NOV 2016
Dividing line
JAN 2017
MAR
MAY
Number of employees
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
3
JUL
SEP
Dividing line
NOV
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
Entrepreneurs are more likely to invest The index measuring investment intentions stood at 30.7 points in November, up by 0.3 points from the previous month and by 3.4 points from November 2016. Despite the increase, the index remains at
a significantly low level. The index ranges from 0 to 100 points and the higher the figure, the more likely entrepreneurs are to invest.
Investment intentions index Diffusion index (0-100 points)*
45
42.6 40
35
30.7 30
25
20 NOV 2014
FEB 2015
MAY
AUG
NOV
FEB 2016
MAY
AUG
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
4
NOV
FEB 2017
MAY
AUG
NOV
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN NOVEMBER
Entrepreneurs are more confident In November, the Construction Business Confidence Index (ICEI) reached its highest point since February 2014 as it increased by 0.6 points to 54.4 points. The increase in confidence observed in November is explained by a rise in the Current Conditions index, which grew by 1.7 points from the previous month and reached 47.8 points. As the index remains below the 50-point mark, it shows that entrepreneurs still believe current business conditions have worsened, but their assessment of conditions is less negative than in October.
Thermometer for the ICEI - Construction Index (0-100 points)*
54.4 lack of confidence
confidence
52.7 (historical average)
The expectations index, which measures entrepreneurs’ prospects for the future of Brazilian economy and of their own businesses, stood at 57.8 points this month, representing a 0.2-point increase as compared to October.
Historical series Diffusion index (0-100 points)*
58.6 Confidence
55.6
54.4
58.3 historical average = 52.7
50.0
50
44.2 Lack of confidence
NOV 2011
36.0
MAY 2012
NOV
MAY 2013
NOV
MAY 2014
NOV
ICEI - Construction
MAY 2015
NOV
MAY 2016
NOV
MAY 2017
NOV
Dividing line
* Figures below 50 points indicate lack of business confidence. The further below 50 points, the more significant and widespread the lack of confidence.
5
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
56
58
59
40.0
46.4
46.9
27.8
32.5
34.1
37.7
45.2
43.1
SMALL
53
55
54
41.3
45.4
46.9
31.4
35.6
36.9
38.6
45.8
46.7
MEDIUM
57
58
61
41.8
47.1
47.0
29.1
31.9
34.8
40.2
45.7
44.2
LARGE
57
60
59
38.4
46.3
46.8
25.8
31.7
32.7
35.9
44.6
41.2
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
CONSTRUCTION
45.5
51.7
50.4
44.7
50.6
50.0
43.9
49.6
49.4
44.2
49.8
49.0
27.3
30.4
30.7
SMALL
46.0
49.9
48.2
45.6
47.9
47.8
42.5
47.8
47.5
44.4
46.5
45.9
25.3
31.0
30.7
MEDIUM
45.8
52.0
51.8
45.7
49.3
50.9
45.1
49.1
51.4
44.9
48.7
50.6
27.8
29.3
31.6
LARGE
45.1
52.2
50.4
43.8
52.3
50.2
43.8
50.6
49.0
43.8
51.7
49.2
27.7
30.8
30.2
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
50.3
53.8
54.4
39.7
46.1
47.8
55.7
57.6
57.8
SMALL
49.6
52.4
51.8
40.2
44.6
44.8
54.6
56.5
55.5
MEDIUM
51.5
53.8
55.5
41.4
45.6
48.8
56.6
57.9
59.0
LARGE
49.9
54.4
54.7
38.6
47.0
48.4
55.5
57.9
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 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: 601 enterprises, including 197 small, 273 medium and 131 large companies. Data collection period: November, 1-14, 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 Construction industry still struggling Data from the October issue of the Construction Industry Survey reflect the difficulties faced by industry in trying to get on a recovery path. The indicator measuring activity levels remained below the 50-point dividing line, indicating a month-over-month decline in construction activity levels. Meanwhile, the indicator of number of employees, which is also below the dividing line, fell at a faster pace in October. Compared with the same month in 2016, however, both indicators are up respectively by 6.9 and 5.4 points. The indicators of actual-usual activity levels and operating capacity utilization grew in October,
but still show that the construction industry is operating below usual levels and with high spare capacity. At the same time, most expectation indicators point to stability. On the other hand, the index measuring construction business confidence and investment intentions rose for the fourth consecutive month – the former shows that entrepreneurs are more confident and that the indicator is above its historical average, while the latter indicates that investment intentions are on a recovery track, though they remain at very low levels.
Activity index Diffusion index (0-100)*
Increase
50
46.7 46.4 46.9 Decrease
44.5 43.3 40.0
44.3
44.1 42.8
40.3 39.3
39.3 37.9
OCT 2016
NOV
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
*The index varies in the 0-100 interval. Figures above 50 points indicate an increase in activity levels.
JUL
AUG
SEP
OCT
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
CONSTRUCTION INDUSTRY PERFORMANCE IN OCTOBER 2017
Employment falls at stronger rate in October The indicators measuring industrial performance continue to show a decline in activity and employment levels in the construction industry, albeit at a slower pace than in 2016. The indicator of expected activity levels dropped by 2.1 points, down from 45.2 points in September to 43.1 points in October. Nevertheless, the index is 5.4 points higher than that registered in October 2016.
The activity level indicator recorded growth of 0.5 points, up from 46.4 points in September to 46.9 points in October. Compared with the same month last year, the indicator edged up by 6.9 points. Yet, since the index remains below the 50-point dividing line, it points to a decline in activity. It is worth noting that the further below the 50 points, the more significant and widespread the decline.
Index of number of employees Diffusion index (0-100)*
Increase
50
Decrease
45.8
45.2 43.1
42.1 41.8 42.6 41.7 42.3 38.4 38.9 37.7 36.8 36.0 OCT 2016
NOV
DEC
JAN 2017
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
* The indicator ranges from 0 to 100 points. Figures above 50 points indicate a month-over-month increase in number of employees.
Idleness keeps declining The operating capacity utilization rate edged up for the fourth month in a row and reached 59% in October, up from 58% in September. The figure, however, is down by 4 percentage points from the historical average for the month.
2
This behavior is not homogeneous across companies of different sizes. Small firms reported a decline in operating capacity utilization (down from 55% in September to 54% in October), as did large businesses (down from 60% in September to 59% in October). Medium companies in turn reported an increase of three percentage points, reaching 61%.
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
EXPECTATIONS FOR THE CONSTRUCTION INDUSTRY IN NOVEMBER 2017
Entrepreneurs expect activity levels to hold steady With respect to activity levels, the indicator remained virtually on the 50-point mark as it dropped by 1.3 points in November to 50.4 points, suggesting an expected stability over the next six months. The indices of new developments and services and of expected purchases of inputs and raw materials reached 50.0 and 49.4 points respectively, also suggesting that these indicators are expected to hold steady at current levels.
The only indicator that entrepreneurs expect to decline over the next six months is that of expected number of employees, which dropped from 49.8 points in October to 49.0 points in November. The indices vary in the 0-100 interval. Figures below 50 points indicate an expected decline.
Expectations indices Diffusion indexes (0-100 points)*
Activity levels
New developments and services Increase
Increase
52.5
51.3
51.7
50.6
50
50
50.4 45.5
50.0
44.7 Decrease
Decrease
NOV 2016
JAN 2017
MAR
MAY
Activity level
JUL
SEP
NOV 2016
NOV
Dividing line
JAN 2017
MAR
MAY
JUL
New developments and services
Purchases of raw materials
Number of employees
Increase
Increase
SEP
NOV
Dividing line
50.6
50.6 50
50
49.6 49.4
49.8
Decrease
NOV 2016
49.0
44.2
43.9 Decrease
JAN 2017
MAR
MAY
Purchases of raw materials
JUL
SEP
NOV
NOV 2016
Dividing line
JAN 2017
MAR
MAY
Number of employees
* The indices vary in the 0-100 interval. Figures above 50 points indicate an expected increase.
3
JUL
SEP
Dividing line
NOV
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
Entrepreneurs are more likely to invest The index measuring investment intentions stood at 30.7 points in November, up by 0.3 points from the previous month and by 3.4 points from November 2016. Despite the increase, the index remains at
a significantly low level. The index ranges from 0 to 100 points and the higher the figure, the more likely entrepreneurs are to invest.
Investment intentions index Diffusion index (0-100 points)*
45
42.6 40
35
30.7 30
25
20 NOV 2014
FEB 2015
MAY
AUG
NOV
FEB 2016
MAY
AUG
*The index varies in the 0-100 interval. The higher the index, the greater the willingness to invest.
4
NOV
FEB 2017
MAY
AUG
NOV
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
CONSTRUCTION BUSINESS CONFIDENCE INDEX IN NOVEMBER
Entrepreneurs are more confident In November, the Construction Business Confidence Index (ICEI) reached its highest point since February 2014 as it increased by 0.6 points to 54.4 points. The increase in confidence observed in November is explained by a rise in the Current Conditions index, which grew by 1.7 points from the previous month and reached 47.8 points. As the index remains below the 50-point mark, it shows that entrepreneurs still believe current business conditions have worsened, but their assessment of conditions is less negative than in October.
Thermometer for the ICEI - Construction Index (0-100 points)*
54.4 lack of confidence
confidence
52.7 (historical average)
The expectations index, which measures entrepreneurs’ prospects for the future of Brazilian economy and of their own businesses, stood at 57.8 points this month, representing a 0.2-point increase as compared to October.
Historical series Diffusion index (0-100 points)*
58.6 Confidence
55.6
54.4
58.3 historical average = 52.7
50.0
50
44.2 Lack of confidence
NOV 2011
36.0
MAY 2012
NOV
MAY 2013
NOV
MAY 2014
NOV
ICEI - Construction
MAY 2015
NOV
MAY 2016
NOV
MAY 2017
NOV
Dividing line
* Figures below 50 points indicate lack of business confidence. The further below 50 points, the more significant and widespread the lack of confidence.
5
Construction industry survey ISSN 2317-7322 • Year 8 • Number 10 • October 2017
Results by company size Construction industry performance Operation Capacity Utilization (%)1
Activity Level2
Actual-Usual Activity Level3
Number of Employees2
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
Oct/16
Sep/17
Oct/17
56
58
59
40.0
46.4
46.9
27.8
32.5
34.1
37.7
45.2
43.1
SMALL
53
55
54
41.3
45.4
46.9
31.4
35.6
36.9
38.6
45.8
46.7
MEDIUM
57
58
61
41.8
47.1
47.0
29.1
31.9
34.8
40.2
45.7
44.2
LARGE
57
60
59
38.4
46.3
46.8
25.8
31.7
32.7
35.9
44.6
41.2
CONSTRUCTION
Expectations for the construction industry New Developments and Services4
Activity Level4
Purchases of Inputs and Raw Materials4
Investment intentions5
Number of Employees4
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
CONSTRUCTION
45.5
51.7
50.4
44.7
50.6
50.0
43.9
49.6
49.4
44.2
49.8
49.0
27.3
30.4
30.7
SMALL
46.0
49.9
48.2
45.6
47.9
47.8
42.5
47.8
47.5
44.4
46.5
45.9
25.3
31.0
30.7
MEDIUM
45.8
52.0
51.8
45.7
49.3
50.9
45.1
49.1
51.4
44.9
48.7
50.6
27.8
29.3
31.6
LARGE
45.1
52.2
50.4
43.8
52.3
50.2
43.8
50.6
49.0
43.8
51.7
49.2
27.7
30.8
30.2
Construction business confidence index and its components ICEI - Construction6
Current conditions7
Expectations8
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
Nov/16
Oct/17
Nov/17
50.3
53.8
54.4
39.7
46.1
47.8
55.7
57.6
57.8
SMALL
49.6
52.4
51.8
40.2
44.6
44.8
54.6
56.5
55.5
MEDIUM
51.5
53.8
55.5
41.4
45.6
48.8
56.6
57.9
59.0
LARGE
49.9
54.4
54.7
38.6
47.0
48.4
55.5
57.9
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 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: 601 enterprises, including 197 small, 273 medium and 131 large companies. Data collection period: November, 1-14, 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.
