Growing slower but still growing

In a difficult year, construction industry reaches 11574 works in Brazil, an increase of 11.8 percent above the former year.

Pivot of the American crisis that occurred at the end of 2008 and caused a strong recession in the whole world, construction industry was one of the areas of the economy that showed higher sensitivity to face the economic crisis that was spread in Brazil due partially to the reduction of private credit. The consequences on the construction chain were not worse due to a series of incentive measures carried out by the government, such as tax exoneration of some construction materials, increase in the credit for habitation, mainly for the program Minha Casa, Minha Vida, and increase in the resources for infrastructure investments inside the Programa de Aceleração do Crescimento (PAC). What we saw however was a reduction in the pace of growth of the industry, in the opposite direction of a strong trend of increase that was occurring in the country before the world crisis.

In 2014, civil and heavy construction in Brazil reached a total of 11574 public and private works including residential, commercial and industrial buildings, 11.8 percent above the figures of 2013. Investment volume was of more than 487 billion dollars, 7 percent above the investments of 2013. These numbers came from ITC – Inteligência Empresarial da Construção that—for the 12th consecutive year—carried out a detailed study about the performance of the industry and issued a ranking of the 100 largest companies that are working in Brazilian market of civil construction.

In spite of the total of works being above that of the former years, the industry presented in 2014 a lower growth rate in the private area. Infrastructure (road) works were the main responsible by the increase of investment. The financial input was of US$ 206 billion from January to December, corresponding to 72 percent of the total of investments of the commercial section.

As expected by businessmen and analysts, the scenario of the industry was reduced in 28 percent, differently of residential buildings, that increased 14 percent, and commercial buildings, that had an investment increase of 28 percent.

According to the trends presented by the study of ITC, the performance of construction industry in 2015 will remain at the same level or below that recorded in 2014, depending also on the expectations related to economy changes and their impact on the income, employment and credit, as well as in the fiscal policy.