One of the drivers of the recovery of the Brazilian economy last year, the construction you’re running out of breath. The Gross Domestic Product (GDP) of Construction in 2022 is expected to grow 2% in 2022, which represents a deceleration compared to 2021, when it rose 8%.
The projection was released on Thursday, 13th, in partnership between Fundação Getulio Vargas (FGV) and the Construction Industry Union of São Paulo (Sinduscon-SP) and follows the same line as the Brazilian Chamber of Construction Industry (CBIC). ), which also expects a rise of 2% for the sectorial GDP this year.
Subscribe to Then24.com and stay on top of the main news that affect your pocket.
The two entities work with a forecast of opening 110 thousand jobs in the sector in 2022, against 246 thousand in 2021 and 98 thousand in 2020.
After record sales and launches of residential properties in the last two years, the sector is experiencing a turning point. Interest rates and inflation have risen sharply and are now inhibiting new business.
About a year ago, it was possible to take out a loan of R$ 200 thousand for the purchase of a home with interest of 6.25% per year. This required families to earn a minimum income of R$5,200 and generated a share of R$1,500. Today, the same loan has a rate of 9% per year, which requires an income of R$ 6,600 (27% higher) and an installment of R$ 2,000 (33% higher), according to Sinduscon/FGV calculations.
“The decision to buy a property is related to purchasing power and the perception of risks and uncertainties”, pointed out the coordinator of studies for the construction of FGV Ana Maria Castelo. “And rising interest rates will certainly have an impact on hiring.”
According to the researcher, there was a drop in supply and demand for materials at the end of the year. Families had been looking for materials for renovations and small domestic works, but general inflation started to inhibit consumption.
Also weighing on the sector are the perspectives of weakness in the Brazilian economy as a whole, and the greater perception of risks. The vice president of Economy at Sinduscon-SP, Eduardo Zaidan, said that the “picture is not good”. “Inflation will be lower this year than last year, but it does not mean that we are free from maladjusted inflation”, he pondered.
He also mentioned that the presidential elections will generate a period of uncertainty, especially with the scenario as polarized as today. “And we still have the fiscal concern that is the background of Brazilian problems”, he amended.
A similar position is shared by Inter Research construction analyst Gustavo Caetano. “With the latest figures observed, we believe that the resumption of construction activity is directly associated with a more favorable macroeconomic scenario, but that still remains volatile in the face of current fiscal uncertainties and with the approach of the electoral debate,” he said in a report.
on the bright side
What will sustain the construction GDP this year will be the opening of new residential construction sites in place of sales stands. Cities like São Paulo, for example, had record launches in 2021 and 2020. Generally, the works start about six to nine months later.
From there comes the purchase of materials and equipment, hiring of personnel and services, which increase the sectorial GDP. “The level of activity that we see today will continue as long as the works last,” said Zaidan. There are also better prospects for infrastructure works, which have been deferred since the beginning of the pandemic.
Covid from outside
Calculations for construction GDP still do not consider the effects of the new wave of covid. So far, the builders have not noticed relevant impacts, but this is a point of attention.
“There is leave (of workers), but it is not something that we can compare with March or April 2020, when up to 30% of the workforce was removed”, commented Zaidan. He pondered that the removal at that time lasted 14 days, while today it ranges from 7 to 10 days. “But it is one more fact to hinder the productivity of the works”, he warned.