The Annual Survey of Construction Industry – 2006 shows there were over 1.5 million persons employed in about 109 thousand companies existing in this sector.

The Annual Survey of Construction Industry – 2006 shows there were over 1.5 million persons employed in about 109 thousand companies existing in this sector. In real terms, the value of construction services performed increased by 7.1%¹ compared to 2005. Considering the products of this sector, between 2005 and 2006, the value of residential construction services increased by 9.4%, whereas for the other three products (non-residential buildings, infrastructure services and other) increased above 20%.

In 2006, with net operating revenue of R$ 105.6 billion, construction companies performed activities and services amounting to R$ 110.7 billion, of which R$ 47.1 billion were relative to construction for public entities and accounted for 42.6% of the construction services performed (versus 40.3% in 2005).

Big companies prevail in construction industry²

In all the selected indicators can be seen the high level of participation of companies with 250 or more employed persons (big companies) (Table 2). Accounting for 16.5% of the companies of this sector in 2006, big companies were responsible for over half of the construction services performed (64.0%). In the same year, they employed more than half of the persons (59.9%) and paid 67.5% of the salaries of the sector.

Among big companies, the ones which employ 1,000 or more persons made up only 3.0% of the total in 1996, but accounted for 37.2% of the construction services and for 37.8% of the salaries, besides 42.3% of construction services for public entities. In terms of the other variables (except the number of companies and employed persons) they have surpassed the group of companies with 250 to 999 employed persons.

Between 1996 and 2006, big companies faced overall decrease. The group ranging from 250 and 999 employed persons decreased most significantly, being its highlights construction services already finished and construction services performed for public entities, both with decrease of 7.1 percentage points. In the group of companies with over 1,000 employed persons, the highlights were the decreases by 1.4 percentage points in the value of construction services already finished and 4.3 percentage points in value added. Between 2000 and 2006, there increase of the importance of big companies in the value of places built and in value added, by 1.4 and 3.3 percentage points, respectively, with increase of productivity by 5.1 percentage points. Even with its stable participation in the number of employed persons, big companies paid more salaries, with increase by 2.2 percentage points. Their participation in value added of construction for public entities decreased by 1.0 percentage points.

Between 1996 and 2006, big companies faced decrease of participation, since, in 1996, they accounted for 71.1% of the construction services performed and, in 2006, for only 64.0%. This can be related to the “internal” outsourcing process of the sector, which may have caused this reduction of participation. It is also important to mention the fall of public investments in the period, which affected big companies mainly. In the period, there was reduction of services contracted by public entities: from 76.0% to 68.3%.

Between 2005 and 2006, construction products and services increased at rates ranging from 9.4% to 22%

Construction industry products surveyed by PAIC since 2002 show the constructed value of over 50 products (for example: residential and commercial buildings; industrial plants; highways; bridges and tunnels; etc) which have been aggregated into four big groups: residential construction services; industrial, commercial and other non- residential construction services; infrastructure construction services and other services.

In 2006, the nominal value of construction activities/services performed by companies with 5 or more employed persons surpassed by 18.5% that of 2005. In real terms, there was increase by 12.3%. big companies grew by 24.7%; the subgroup ranging from 250 to 999 employed persons grew by 20.2%, and the group with 1,000 or more employed persons grew by 30.1%, due to a group of factors which positively affected the construction sector in 2006.  Among these factor is the opening of the capital of some companies in the São Paulo stock market, in which such companies obtained resources for new enterprises and for the acquisition of other companies.

Real estate credit stimulates residential construction segment

The value of Residential construction services increased by 9.4%. Residential buildings, the main product among the 54 construction products, increased by 12.1%. The factors accounting for this change were: the expansion of real estate credit, the favorable economic scenario for construction and renovation of residences, and changes such as the special tax system of related property and chattel mortgage, for example.

According to the Central Bank of Brazil, the amount directed to real estate credit in 2006 was 85.5% bigger than in 2005, and the number of housing units financed, 71.3% bigger. From savings account, in 2006, to finance 111 296 units, were directed R$ 9.2 billion (47.3% for construction and 52.7% for the acquisition of ready housing units). 

In 2006, among companies which performed residential construction services, the ones with 250 or more employed persons accounted for 29.1% of the value of construction, being 23.6% for the subgroup with 250 to 999 persons, and 5.5% for the ones with 1,000 or more employed persons, confirming that small companies prevail in this segment.

Between 2005 and 2006, the increase of value of services performed by big companies with up to 999 employed persons was 8.5%, whereas for those with 1,000 or more, the increase was 42.5%, overcoming the increase of 9.4% of the total of companies.

In 2006, the group of non-residential buildings increased by 20.2%, influenced by construction services in schools, hospitals, hotels and garages (49.9%), hangars and industrial buildings (26.7%); industrial plants (31.6%), mining plants (101.6%) and sports facilities (45.8%), whose increase is related  to the Pan American games, which were held in Rio de Janeiro, in 2007.

Companies with 250 to 999 employed persons concentrated 21.1% of the places built ad the ones with 1,000 or more employed persons, 22.5%. Big companies concentrated 43.7% of the value of the construction services in this segment. The increase between 2005 and 2006 for both groups of big companies was, respectively, 39.6% and 4.6%.

Infrastructure: increase of 20.5% compared to the 2005 result

The value of infrastructure construction services, the most relevant group in construction, increased by 20.5 in relation to the previous year and resulted in bigger relative participation of this group in the total construction services rendered, from 36.0% to 36.7%. This change may be related to the increase of 19.3% of services contracted by the public sector. The most relevant products accounting for this result were: highways, whose value increased by 31.5%; bridges and tunnels (54.8%); ducts (oil ducts, gas ducts, mineral ducts), with 69.7% of increase and networks for transmission and distribution of electricity (26.1%).

Big companies prevail in infrastructure construction services. The ones with 250 to 999 and with 1,000 or more employed persons accounted, in 2006, for 31.2% and 345.1% of the value of places built, respectively; these percentages were similar to those in 2005. As a consequence, big companies accounted for over 65% of the value of infrastructure construction services. The increase, in relation to 2005, was 16.5% for the former group of big companies and 34.2% for the latter.

Finally, in the group of other services, the value increased by 22.0%. the main positive impact came from previous construction services (26.0%), which indicates the conduction of new services. It is also worth mentioning electricity and telecommunications installations (27.8%); and finishing works (25.8%). The subgroups with 250 to 999 and with 1,000 ore more employed persons concentrated 22.3% and 21.3% of the value of services, respectively. In relation to the previous year, the increases of these two subgroups were, respectively, 25.4% and 53.5%.

Southeast faces decrease in participation, but its companies still provide most construction services

The Southeast has kept its relevant economic position in the sector and in the country, however, with decrease in participation. There has been gradual transfer of construction activities to other regions, as a consequence of a process of territorial spread of economic activity due to the influence of such factors as: expansion of the agricultural frontier towards the Central West and North Regions, with the subsequent increase of agribusiness-related activities and of the migration flow; the implementation of new industries and retail chains in the Northeast.

In spite of this loss, the Southeast Region still accounts for over half of the employed persons and of the value added of construction services performed by companies with 40 or more employed persons. In 1996, the Region held 59.5% of the persons employed in construction companies, a figure which fell to 54.0% in 2006. Considering the value of places built, the Southeast accounted for 66.2% in 1996 and for 56.3% in 2006. In the group of big companies, the Region had participation of 63.1% of employed persons, having changed to 57.6% in 2006. The big companies of the Southeast performed 66.7% of construction services in 1996 and 59.3% in 2006.

The North increased its participation in terms of employed persons and value of places built, also among big companies, which held 3.6% of the employed persons in 1996 and 6.8% in 2006. Concerning places built, the rates were 3.2% and 7.3%, respectively, being the main highlight the increments in Amazonas and Pará (Table 3).

In the Northeast, which employed 17.4% of the persons in big companies in 1996, there was increase of 19.0% in 2006. The figures for value of places built in both years were 12.7% and 14.7%, respectively. Bahia was the highlight, with 3.7% of the value of places built by big companies in 1996 and 6.4% in 2006.

In the South, changes were slight. Companies with 40 or more employed persons have kept their positions. The participation of companies in the value of places built increased to 1.0 pp; the participation of big companies fell by 0.3 percentage points.  

In the Central West, both companies with 40 employed persons or more and big ones had increase of importance. The participation in the value of places built of the former changed from 6.8%, in 1996, to 9.4% in 2006. In the group of big companies, the respective rates were 6.8% and 8.4%.

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¹ The deflation was effected by IBGE's SINAPI, which changed by 5.47%.

² The coverage of comparisons with 1996 and 2000, due to methodological reasons, is companies with 40 or more employed persons.