The Construction Confidence Index (ICST) published by the Getulio Vargas Foundation increased by 75.1 points – the highest level since June 2015 when the index hit 76.2 points.
“The improvement in expectations indicates companies expect falling activity to ease soon,” says Ana Maria Castelo, FGV/IBRE Construction Project Coordinator, “This reduction of pessimism is also reflected in the job indicator as firings should ease in the near term. However, this will not increase the intention to hire. Insufficient demand remains the number one factor limiting business, while firing will continue to outpace hiring.”
The ICST’s increase was mainly due to short-term business prospects as the expectations index rose 1.7 points to 87.8 points; the highest level since September 2014 (when it was 88.4 points). The sub-component that measures optimism for the following six months increased by 2.2 points, hitting 90.1 points at the margin. The current situation index dropped for the second month, falling by 0.2 points to close at 62.8 points. However, the main decline came from the perception of contracts, which fell 0.6 points from the previous month, totalling 61.5 points.
Capacity utilization fell by 0.4 percentage points in March, reaching 63.0%.
The Construction Confidence collects information from 700 companies between March 3 to 24.