In a general way, the Brazilian sector of construction reduced its activities in 2005, in the comparison with 2004. The constructions performed had a real decrease of 5.4%

In a general way, the Brazilian sector of construction reduced its activities in 2005, in the comparison with 2004. The constructions performed had a real decrease of 5.4%¹ . Still in real terms, a more pronounced decrease was verified in the value of constructions for public entities, which had a reduction of 8.0% between the two years.  The data are shown by the PAIC (Annual Survey of the Industry of Construction), which shows a gradual process of deconcentration of the industry of construction. Loss of participation was recorded by the Southeast Region, influenced mainly by São Paulo and Rio de Janeiro, and gain was registered mainly in the North of the country, where industrialization levered constructions and personnel employed, especially in Amazonas and Pará.

According to PAIC, in 2005, the more than 105 thousand companies of the sector of construction generated almost 1.6 million employments, with salary expenses above R$ 15.5 billion, which amounts to an average monthly salary of 2.7 minimum wages. The industry of construction performed constructions and services with the value of R$ 100.0 billion, and, from this amount, R$ 41.7 billion came from constructions acquired by public entities.

The negative results presented by the PAIC can be related to the deceleration in the rhythm of growth of the Gross Domestic Product (GDP), which changed from 5.7% in 2004 to 2.9% in 2005 ². The performance of the Brazilian economy in 2005 showed the context of a contractionary monetary policy, directed to maintain the stability of prices.  The deceleration of the GDP was still more pronounced regarding investment, whose variation changed from 9.1% in 2004, to 3.6% in 2005.  High interest rates affected the decisions of investment by companies and families influencing significantly the sector of construction.

Value of residential constructions fell by 3.8% from 2004 to 2005

In 2005, the nominal value of constructions and services performed by companies with five or more employed persons³ was 2.8% higher than in 2004, although, in real terms⁴, there was a decrease of 6.3%.

The group industrial, commercial and other non-residential constructions increased by 2.9% in nominal terms ⁵, due to the good performance of commercial constructions, whose increase reached 24.0%. This result can be related to the increase in the number of shopping centers in the big and middle Brazilian cities. Other products that contributed for this growth were hangars and industrial buildings (2.3%), industrial plants (3.0%) and sports installations (22.3%).

The value of infrastructure constructions fell by 1.0% in relation to 2004. This result occurred mainly due to plants, hydroelectric, thermoelectric and nuclear stations and substations (-26.2%); barriers and dams for the generation of electricity (-23,2%); ducts (-17.2%); and installation of telecommunications tower system (-12.3%).  On the other hand, the main positive contributions came from subway and train lines (50.7%); tunnels, overpasses and bridges  (25.0%); highways (3.9%); and streets, sidewalks, squares and parking places (6.8%).

The residential constructions also fell by 3.8%. Despite some decisions of the federal government since 2004, such as a special tributary patrimony program and the major volume of resources directed to the Housing Financial System (SFH), the residential constructions decreased.  These constructions which have the major participation in construction, decreased by 7.1%, not sustaining the positive result of 2004, when it had grown 31.9% compared to 2003.

In conformation with statistics of the SFH, R$ 4.9 billion were granted for financing of 64,977 residences in 2005 with resources of saving accounts (caderneta de poupança). 58.0% of this total were directed to the financing of the construction of real estate and 42.0% for the acquisition of already constructed units.  The average nominal value by financed unit was R$ 76 thousand.  The amount lent in 2005 was, in nominal terms, 41.6% higher than the one granted in 2004, and the number of financed units, 5.3% greater. If we consider that the number of financings were not directed completely to new units, together with the fact that the average value of financings by unit has been relatively high, it is possible to suppose that the access to real estate credit has been available basically to middle and high income families.  

Finally, the group other constructions had the most significant growth (16.4%). The main increases came from electrical installations and telecommunications (20.7%), previous works of construction (12.6%) and rent of equipment of construction and demolition with operator  (71.6%). The main retractions in this group were observed in assembly of metallic structures (-16.2%); air conditioning, refrigeration, ventilation and heating installations (-10.1%) and hydraulic, sanitary and gas installations (-6.9%).

The details of the total value of constructions and services of the construction companies in 2004 and 2005 and the change between these two years by group and product can be found in table 5.

North Region increases participation in the industry of construction

From 1996 to 2005, the North Region was the one that most increased its participation in the industry of construction.  On the other hand, the Southeast Region registered the major loss.  The regional dynamic of the companies of construction follows the relation of the process of descentralization of the Brazilian economy as a whole.  The directing of activities to regions of less complex economic activities is related to a series of factors such as expansion of the agricultural frontier; fiscal incentive policies and construction of residential buildings in agricultural areas.

The analysis of regional data encompasses the companies of construction with 40 or more employed persons, since from 1996 to 2001, the PAIC studied only this group of companies. In 2005, these companies answered for approximately 60.0% of the value of the performed constructions.

In the analyzed period, the Southeast lost participation in relation to the constructions performed, from 65.7% in 1996 to 55.2% in 2005, and regarding the employed persons, from 62.3% to 53.6%.  São Paulo and Rio de Janeiro reduced their participation in the total constructions from 39.7% and 14.5% to 30.4% and 10.6%, respectively.  In terms of employed persons, the decrease was of 6.3 and 4.0 percentage points, respectively. However, the Southeast still concentrated in 2005 more than half of the constructions performed (55.2%) and of the employment generated by the companies of construction (53.6%).

The decrease of the Southeast was followed by the increase of the other regions. The most significant increase occurred in the North, where the constructions performed and the employed persons had hikes of 4.2 and 3.3 percentage points, respectively. In the region, stood out Pará, followed by Amazonas and by Tocantins.  In the two first cases, the economy is being favored by the growing industrialization.  In Tocantins, the expansion of the activity of construction may be associated to the needs of urbanization.

The Northeast Region had between 1996 and 2005, the second major increase of participation in construction (3.0 percentage points in relation to construction as well as employed persons), especially Bahia, where incentive policies are being taken regarding the installation of big-size companies.  Another important increase was registered in the Central West (2.4 and 1.5 percentage points, respectively), where stood out, regarding constructions performed, the Federal District (growth of 1.8 percentage points). In terms of employed persons, the major increase of the region came from Mato Grosso (1.0 percentage points). Finally, the South Region increased by 0.9 percentage points the constructions performed as well as the employed persons.  The most relevant contribution came from Rio Grande do Sul (1.5 and 1.0 percentage points, respectively).

Among the states, Bahia and Pará had the major gains in participation in the industry of construction in relation to employed persons as well as constructions performed.  Bahia had growth of 3.5 percentage points in the employment and 2.6 percentage points in the value of constructions; and Pará increased by 2.1 percentage points the participation in the two variables.  In the other end, São Paulo and Rio de Janeiro registered the major negative changes (-6.3 and –4.0 for employed persons and –9.3 and –3.9 for constructions, respectively).

Notes:

1) Deflated by the National System of Costs Survey and Indexes of Construction Indexes (Sinapi), calculated by the IBGE, whose increase in the period was 9.8%.

2) Calculation based in the System of National Accounts 2000-2005, new series, which has as initial reference the year 2000.

3) In this analysis, only the information of companies with five or more employed persons were considered, since the group of companies up to four employed persons was not organized to generate results focusing on product.

4) Sinapi was used.

5) It was analyzed the evolution of the value of the products of construction in nominal terms, since Sinapi is not detailed by types of constructions and/or services.