According to the 2003 Annual Construction Industry Survey, the nominal fall of 4.0% in construction services in relation to 2002 was determined, to a great extent, by the performance of the infrastructure activity (-13.7%), subsector of road repair and maintenance (-23.4%). Almost all the products of this subsector presented decline, but the highlights were streets, squares and parking lots (-52.4%). The same kind of performance was observed in other products, such as sewage and water distribution systems, which fell by 22.9% over the year. The diminished relevance of infrastructure construction services to the total revenue of construction companies is also seen in the data collected from different types of clients: the cost of services hired by public institutions, representing 70.6 % of the total in 2002, fell to 62.0% in 2003.

The 2003 Annual Construction Industry Survey registered about 119 thousand construction companies in the country, employing 1.4 million people with an average monthly income of 4 minimum wages.

Participation of the public sector falls

Out of the total cost of constructions, R$ 73.8 billion in 2003, about R$ 30.7 billion were spent on the public sector. These figures, however, indicate real falls of 17.8% in the total cost of construction (values already deflated) and of almost 30% (29.5%) in the cost of services contracted by public institutions, in relation to 2002.

According to the National Accounts, the expenditures of Public Administration with the construction activity, a component of GDP, fell from 16.1% to 12.3% in two years. In 2003, the GDP for the subsector of construction activities decreased by 5.2%.

Increase in the contribution of building services and decrease in the in the contribution of infrastructure services

Although the building and the infrastructure activities represented about 78% of the total cost of services in the construction industry in both years, important changes were observed from 2002 to 2003. The participation of building services increased from 38.8% to 42.9% and infrastructure services fell from 39.1% to 35.1% of the total services over the year.

In the same period, the participation of installation services went from 9.5% to 11.1%, stimulated, principally, by electric and telecommunication installations.

The growth of 6.6% in residential buildings, contrasting to an overall fall of 4.0% in the construction sector, caused that product to remain as the principal one in the sector. Its contribution to the total construction changed from 18.3% to 20.3%.

The demand for building services is typical of the private sector. This characteristic was evident in 2003. In this year, this type of client corresponded to 70.7% of the total cost of building services, differently from the 67.5% in 2002. Concerning building services, relevant increase was observed in commercial buildings, 14.5% from 2002 to 2003.

The expenses with infrastructure, a typical request from governmental institutions, fell from 70.6% to 62.0%.

The construction of three types of products: roads; streets, squares and sidewalks and other road repair and maintenance services revealed important increase in the contribution by the private sector, from 16.3% to 22.4%.

Public investment also gave way to private sectors in infrastructure services for electric energy and telecommunications (from 48.9% to 41.2%) and in other engineering services, with a change from 36.9% to 46.0%.

One of the exceptions was services for installation of short and long distance communication towers. It presented reduced participation in the private sector (falling from 86.3% to 77.2%) and in the general construction activity (from 1.5% to 0.8%), the decline of the period of big investments in the telecommunication sector (cell phones, conventional telephony, etc).

The construction company sector depends a lot on the internal market and on the public expenses, a consequence of the leading activities, building and infrastructure, respectively. Nevertheless, the revenue from repairs and services abroad has increased, going from R$ 1.1 billion in 2002, to R$ 2.0 billion in 2003, even though it represented only 2.6% of the total revenue last year.

The retraction of the internal market, in 2003, affected the demand for building services. This activity had no increase in production was registered, only more participation in the total services, as a result of the retraction in infrastructure services. The 2003 National Accounts registered a fall of 1.5% in the consumption of families and of 7.2% in the use by the construction activity subsector.

Regional deconcentration of activities, minor contribution of the Southeast region

The data by area indicate spatial deconcentration in the subsector of construction companies in general, expressed by the minor participation of the Southeast and in the major relevance of other areas. Concerning the total number of people employed in construction companies, the North and South regions increased their participation between 2002 and 2003, from 5.6% to 6.4% and from 15.0% to 16.0%, respectively, whereas in the Southeast the figures changed from 52.4% to 50.6%.

The North and South regions have acquired relevance in terms of cost of construction or repair services, with Santa Catarina and Rio Grande do Sul as the main highlights, whereas the Northeast and the Southeast regions register decrease in participation concerning the same kind of services.