Costs in construction decelerate to 0.14% in June

Section: Economic Statistics | Carmen Nery

July 10, 2020 09h00 AM | Last Updated: July 13, 2020 09h43 AM

Construction cost per square meter increased from R$1,174.02 in May to R$1,175.62 in June - Photo: Helena Pontes/IBGE News Agency

The National Index of Civil Construction (Sinapi), released today (10) by the IBGE, rose 0.14% in June, the lowest rate of 2020 and the lowest index in June, from the serie with exemption, started in 2013. The rate is 0.3 percentage points lower than the result recorded in April (0.17%) and 0.21 pp below the index of June 2019 (0.35%).

The result show deceleration in the monthly rate of aggregate costs, and in all of the cumulative indexes. From January to June, the index accumulated 1.47%, against 1.97% in same period last year. In the last 12 months, the rate accounts for 3.52%, against 4.25% in June last year.

“The cumulative results in 12 months regarding workforce decreased from 3,51% in May to 3.37% in June. The cumulative costs in 12 months of materials decreased from 3.89% in May to 3.60% in June 2020”, comments Sinapi’s survey manager Augusto Oliveira.

The national cost of construction, per square meter, closed at  R$1,174.02 in May and changed to R$1,175.62 in June, with R$616.59 related to materials and R$559.03 to workforce.

The share of materials presented a change of 0.17%, recording a fall of 0.02 percentage points in relation to the previous month (0.19%) and of 0.28 pp in comparison with the index of June 2019 (0.45%).

Regarding workforce, the recorded rate was of 0.10%, also decreasing in relation to the index in the previous months (0.14%). In relation to June 2019 (0.24%), it has decreased 0.14 pp.

From January to June, the cumulative indexes are 1.81% (materials) and 1.05% (workforce), whereas in the 12 months, they were 3.60% (materials) and 3.37% (workforce).

The survey manager, Augusto Oliveira, explains that this deceleration in the costs of workforce are a consequence of the lower bargain power of the labor union due to a downturn in Construction. The collective agreements and bargaining have been only offsetting the inflation, with no wage gains. “Moreover, materials has decelerated their prices due to the demand reduction with the sector’s downturn.” adds Mr. Oliveira.

North Region records the highest monthly change

The North Region, with positive rates in 6 out of its 7 states, was the highest regional change in June, 0.31%.

The other regions recorded the following results: 0.19% (Northeast), 0.14% (Southeast), -0.05% (South) and 0.06% (Central-West).

The regional costs, per square meters, were: R$1,185.14 (North); R$1,091.56 (Northeast); R$1,224.52 (Southeast); R$1,230.5 (South); R$1,176.87 (Central-West).

Among the Federation Units, Espírito Santo stands out with high of 1.32% recorded in the professional categories. “The highest rate was due to the increases agreed in the collective bargaining”, he concludes.