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Difficult period with the civil construction sector in crisis – falling GDP.

14 July 2018 to 16: 13
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Construction in crisis.

Difficult period with the civil construction sector in crisis. The decline in the sector's GDP represents the 16th consecutive decline. Companies cannot see improvement.

With the construction in crisis, GDP in this area had its 16th consecutive drop in the first three months of 2018. This represents the worst performance of the economy this year. The GDP (of this sector) encompasses the total billed by civil construction companies and the wages of their employees.

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Comparing 2018 with 2017, both in the same period, there was a drop of 2,2%, thus putting in check the hope of improvement in the current scenario in view of the companies.

Civil Construction started 2018 with a reduction in its activities and it is worth noting that it represents more than 50% of investments in Brazil, maintaining the enormous generation of labor as a characteristic. In the last four years, it registered a drop of 20. On any basis of comparison, the results of the sector's GDP show that its activities remain depressed.

The timid pace of Civil Construction activities is justified by the slow process of economic recovery. For the second quarter, the situation tends not to take big steps. Also affected by the major crisis caused by the strike/stoppage of truck drivers, the Civil Construction sector also presents losses in its activities, as well as in other sectors of the economy in the country.

The good side of this story is that the wave of layoffs in civil construction has eased, but, however, we cannot say when companies will start hiring en masse.

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Insecurity in the market

The owner of the construction company MBigucci, Milton Bigucci, points out that the market's insecurity is very high and this makes it difficult for consumers to make decisions and create new jobs. The pace of investments remains on standby.

Only when he feels that the consumer is more willing and willing to invest in a property will he launch his new projects (although he already has at least 6 drawers and approval by the City of São Paulo), says Milton.

“Uncertainties in the economy and in politics are very strong and the sector feels that the customer is more insecure than at the beginning of the year”, says Bigucci,

Cancellations

Many buyers returned their properties acquired in the plant in the face of the great crisis and this became a big nightmare for builders. The Civil Construction sector claims a regulated way to minimize losses when a return occurs. The Chamber approved a bill that regulates cancellations.

  • With the expectation and hunch of sales improvement after the October elections, businessman Alexandre Frankel (Vitacon construction company), justifies that the consumer is scared. His company has 9 developments ready to be launched this year.

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Lack of Investment

Affected by the moment of the economy, the situation of the construction in crisis suffers from lack of investment. The current amount/volume of investment is not even enough to maintain the infrastructure, let alone new buildings. Anyway, even with all the discouragement due to the current economic situation in the country, it is believed that this sector will catch up again until the end of the year, after the elections.

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