The results for the October issue of the survey consolidated the upward trend in the construction industry.

The indicators related to production experienced significant increases, particularly those measuring activity and employment levels, which reached their highest point in seven years. The activity index stood very close to the 50-point dividing line at 49.9 points, a result very similar to that observed at the end of 2012, when the sector was still vibrant.

Future trend indicators also show optimism. Investment intentions are up and remain above their average level, reinforcing the growth outlook. All expectation indices increased and show optimism among entrepreneurs.

Finally, the ICEI-Construction index hit the mark of 62 points in November, confirming that entrepreneurs are confident—a trend driven mainly by the current conditions of the Brazilian economy index.

Construction shows signs of growth

50Increase

Decrease

NOV JAN

2019

OCT

2018

DEC FEB MAR APR MAY

42.5

44.0

48.2

47.2

48.4

49.549.9

47.3 47.5

48.5

JUN JUL

49.2

47.9

AUG SEP OCT

INDICATORSECONOMICISSN 2317-7322 • Year 10 Number 10 • October 2019

Activity and employment index Diffusion index (0-100 points)*

Activity levels Number of employees Dividing line

*The index ranges from 0 to 100. Figures below 50 points indicate a decline in activity and employment levels.

CONSTRUCTION INDUSTRY SURVEY

2

INDICATORSECONOMIC

Construction industry surveyISSN 2317-7322 • Year 10 Number 10 • October 2019

The indices measuring month-over-month activity levels and number of employees showed a significant improvement in October, consolidating the upward trend in the sector.

The activity indicator reached its highest point in seven years as it amounted to 49.9 points, up by 0.4 point from September. The index is virtually on the 50-point dividing line, showing that activity levels remained unchanged from the previous month.

The index of number of employees increased by one point on a month-on-month basis to 48.5

Activity and employment rebound

Operating capacity utilization remains at average levels

PERFORMANCE OF CONSTRUCTION INDUSTRY IN OCTOBER 2019

points in October. This also marks the highest level since October 2012, when the indicator reached 49.6 points. The fact that the index is closer to the dividing line suggests that employment is still down month-on-month, but the decline is slower than in previous months.

Both indicators show an improvement as compared to the previous year: the activity index is up by 2.2 points, while the one measuring employment levels is 3.6 points higher than the figure registered in October 2018.

Operating capacity utilization stood at 62% in October—the same level as its historical average—and is up by 3 percentage points from a year ago. Spare capacity in the construction industry has been decreasing since May of this year, and the operating capacity utilization rate had been below its historical average since January 2015.

Small companies show the highest idle capacity, with operating capacity utilization standing at 58%. The indices for medium and large enterprises amounted to 61% and 64%, respectively.

50

55

60

65

70

OCT

2014

FEB

2015

JUN OCT FEB

2016

JUN OCT FEB

2017

JUN OCT FEB

2018

JUN OCT FEB

2019

JUN OCT

61

58

62%Oct/2019

58

63

59

57

Historical average: 62%

Operating capacity utilizationPercentage (%)

3

INDICATORSECONOMIC

Construction industry surveyISSN 2317-7322 • Year 10 Number 10 • October 2019

CONSTRUCTION INDUSTRY’S EXPECTATIONS IN NOVEMBER 2019

The expectation indicators show that entrepre-neurs expect to see economic growth over the next six months.

The index measuring expected activity levels reached 54.9 points, up by 0.7 point from October and by 0.2 point from November 2018.

The index of new developments and services increased by 0.5 point in November month-on-month to 53.9 points, but is the only indicator to show a decline from a year ago.

Entrepreneurs expect growth of the construction industryExpectations about purchases of inputs and raw materials also improved, with the index rising by 1.2 points month-on-month and by 0.8 point year-on-year to 54.2 points.

Finally, the index of expected number of employees rose by 1 point on a month-on-month basis and by 1.1 points on a year-on-year basis to 53.9 points in November.

NOV

2018

JAN

2019

MAR MAY JUL SEP NOV

50

Increase

Decrease

58.4

54.9

54.5

54.8

54.2

NOV

2018

JAN

2019

MAR MAY JUL SEP NOV

50

Increase

Decrease

58.1

53.9

53.0

53.4

NOV

2018

JAN

2019

MAR MAY JUL SEP NOV

50

Increase

Decrease

56.5

54.2

52.6

53.7

53.0

NOV

2018

JAN

2019

MAR MAY JUL SEP NOV

50

Increase

Decrease

56.1

53.9

52.6

52.4

52.9

Activity levels New developments and services

Expectations indicesDiffusion indexes (0-100 points)*

Activity level Dividing line New developments and services Dividing line

Purchases of inputs and raw materials Number of employees

Purchases of raw materials Dividing line Number of employees Dividing line

*The indices vary in the 0-100 interval. Figures above 50 points indicate an expected growth.

4

INDICATORSECONOMIC

Construction industry surveyISSN 2317-7322 • Year 10 Number 10 • October 2019

Investment intentions grow againThe index measuring investment intentions (purchases of machinery and equipment, research and development, and product or process innovation) grew by 1.7 points in November from October to 37.9 points.

The increase in the index reinforces the upward trend. The indicator is up by 5.4 points from a year ago and by 4.1 points from its historical average. The index ranges from 0 to 100 points and the higher the reading, the more entrepreneurs are willing to make investments.

31.1

33.8

24

28

32

36

40

NOV

2016

MAY

2017

NOV MAY

2018

NOV MAY

2019

NOV

Historical average = 33.8

27.3

26.6

30.6

35.2

32.5

38.0

32.8

37.9Nov/19

33.1

36.637.2

36.2

*The index varies in the 0-100 interval. The lower the index, the lower the willingness to invest.

Investment intentions indexDiffusion index (0-100 points)*

5

INDICATORSECONOMIC

Construction industry surveyISSN 2317-7322 • Year 10 Number 10 • October 2019

CONSTRUCTION BUSINESS CONFIDENCE INDEX IN NOVEMBER

Economic conditions in Brazil contribute to the increase in confidence

The Construction Business Confidence Index (ICEI-Construction) reached 62 points in November, representing a 3.2-point increase from October. Confidence levels are up by 12 points from the 50-point dividing line and by 8.4 points from the historical average, reinforcing the optimistic trend among construction entrepreneurs.

Among the components making up the ICEI-Construction index, the current conditions indicator contributed the most to the increase in confidence, leveraged by the index measuring current conditions of the Brazilian economy, which increased by 5.5 points. The expectations index edged up by 3 points, driven mainly by the index of expectations about the Brazilian economy, which recorded growth of 3.6 points.

53.5 (historical average)

lack of confidence confidence

62.0

Confidence

Lack of

confidence

50

Historical average = 53.6

NOV

2013

NOVMAY

2014

44.2

60.763.7

36.0

54.4

55.8

62.0Nov/19

NOVMAY

2015

NOVMAY

2016

NOVMAY

2017

NOVMAY

2018

NOVMAY

2019

50.3

Thermometer for the ICEI-ConstructionIndex (0-100 points)*

*Figures above 50 points indicate business confidence. The further above 50 points, the more significant and widespread the confidence.

Historical series Diffusion index (0-100 points)*

ICEI - Construction Dividing line

INDICATORSECONOMIC

Construction industry surveyISSN 2317-7322 • Year 10 Number 10 • October 2019

Operation CapacityUtilization (%)1 Activity Level2 Actual-Usual Activity Level3 Number of Employees2

Oct/18 Sep/19 Oct/19 Oct/18 Sep/19 Oct/19 Oct/18 Sep/19 Oct/19 Oct/18 Sep/19 Oct/19

CONSTRUCTION 59.0 62.0 62.0 47.7 49.5 49.9 35.5 37.9 38.8 44.9 47.5 48.5

SMALL 54.0 55.0 58.0 46.5 45.4 47.3 36.5 38.8 39.9 46.5 44.6 46.4

MEDIUM 59.0 59.0 61.0 46.4 48.6 48.7 34.9 36.8 39.3 44.3 46.1 46.9

LARGE 61.0 67.0 64.0 48.8 51.6 51.6 35.5 38.2 38.2 44.7 49.3 50.2

Activity Level4 New Developments and Services4

Purchases of Inputs and Raw Materials4 Number of Employees4 Investment

intentions5

Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19

CONSTRUCTION 54.7 54.2 54.9 54.5 53.4 53.9 53.4 53.0 54.2 52.8 52.9 53.9 32.5 36.2 37.9

SMALL 57.7 51.9 58.1 56.0 50.1 57.1 54.5 49.6 55.9 54.6 48.1 54.7 37.0 32.5 37.5

MEDIUM 54.4 52.1 53.5 52.6 50.1 52.1 53.2 49.9 53.1 50.8 49.0 52.3 32.6 34.3 37.3

LARGE 53.7 56.3 54.6 55.0 56.5 53.7 53.1 56.1 54.2 53.3 56.8 54.6 30.8 38.7 38.4

ICEI - Construction6 Current conditions7 Expectations8

Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19 Nov/18 Oct/19 Nov/19

CONSTRUCTION 60.7 58.8 62.0 49.2 50.7 54.4 66.5 62.8 65.8

SMALL 60.2 56.2 61.7 48.1 48.9 54.6 66.6 59.8 65.3

MEDIUM 59.7 56.8 62.2 48.1 49.6 55.4 65.5 60.4 65.7

LARGE 61.4 60.8 62.0 50.2 52.0 53.7 67.0 65.2 66.0

Results by company size

Construction industry performance

Expectations for the construction industry

Construction business confidence index and its components

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 specificationsSample profile: 483 enterprises, including 167 small, 208 medium and 108 large companies. Data collection period: November, 1-12, 2019

iiLearn moreFor more information on the survey, including sectoral results, previous editions, methodology and historical series, visit: www.cni.com.br/e_sondconstr

CONSTRUCTION INDUSTRY SURVEY | English version of “Sondagem Indústria da Construção - Outubro 2019” | Monthly Publication of the National Confederation of Industry - CNI | www.cni.com.br | Industrial Development Board - DDI | Economic Policy Unit - PEC| Executive manager: Flávio Castelo Branco | Research and Competitiveness Unit - GPC | Executive manager: Renato da Fonseca | Statistics Unit | Manager: Edson Velloso | Analysys: Dea Guerra Fioravante | Team: Roxana Campos, Aretha Silícia Lopez Soares e Ieda Vasconcelos (CBIC) | Editing Unit | Coordinator: Carla Gadelha | Graphic design: Simone Marcia Broch | Customer Service - Phone: +55 (61) 3317-9992 – email: sac@cni.com.br | This publication may be copied, provided that the source is cited.