PAIC 2018: Construction industry sees reduction in infrastructure works and in contracts with the public sector
May 27, 2020 10h00 AM | Last Updated: May 28, 2020 01h52 PM
Construction activity generated R$ 278,0 billion in value of real estate development and construction works and/or services in 2018, being R$ 264,4 billion relative to construction works and or services and (95.1%) and R$ 13.6 billion to real estate development. Data from the Annual Survey of Construction Industry (PAIC 2018) show there was decrease in participation for Infrastructure Works in the value of activity between 2009 and 2018, from 46.5% to 31.3%. The segment of Building construction increased from 39.5% to 45.5% in the same comparison, placing that activity as number one in the ranking; Specialized construction services increased its participation by 9.2 percentage points (p.p.), from 14% to 23.2%.
The public sector fell in terms of representativeness as a client of construction works, with a decrease of 12.5 p.p. in the last ten years (from 43.2% to 30.7%) in the three segments: Infrastructure works, from 61.5% to 50.4%; Building construction, from 28.6% to 21.9%; and Specialized construction services, from 20.4% to 19.3%.
In the end of 2018, the construction segment encompassed 124.5 thousand active companies, which pointed to an increase of the sector versus 2009, when there were 63,829 active companies. Having the most recent period as a reference, between 2015 and 2018, the sector lost about 6,8 thousand companies, and faced a 5.2% decrease. Between 2017 and 2018, Construction industry lost 1,736 companies (-1,37%).
In 2018, construction works employed 1.9 million persons, 9.0% below the figure in 2009 (2,1 million). In that period, the sector lost about 183,8 thousand work positions. The peak of employment occurred in 2013, with about 2,968 million workers. From that moment up to 2018, the loss of jobs reached 1,1 million. Between 2017 and 2018, Construction industry lost 31,502 work positions, a figure equivalent to -1.66%.
Between 2009 and 2018, those companies had a decrease in the average number of employed persons, from 33 to 15, and the average monthly salary fell from 2.6 to 2.3 minimum wages.
All the segments registered decreases in the average number of employed persons. The one facing the biggest reduction in employment between 2009 and 2018 was infrastructure works, which used to have the majority of middle-sized companies (from 92 to 43) and the highest average salary (from 3.4 p to 2.8 minimum wages).
Building construction causes infrastructure works to lose leadership in terms of value generated
The three sectors of construction industry accounted, in 2018, for the following figures regarding value of real estate development and construction works and/or services: Building construction (R$ 126,6 billion), Infrastructure works (R$ 87,0 billion) and Specialized construction services (R$ 64,4 billion).
The main structural change observed in the period was the change of position by Infrastructure works, whoso participation fell from 46.5% in 2009 to 31.3% in 2018. However, such reduction in relevance was counterbalanced by the advance in the Building construction segment, which encompassed 45.5% of the value of real estate development, and construction works and/or services in 2018, and was placed as number one in the ranking. The segment of Specialized construction services was in the third position, but it recorded the major increase in participation throughout the decade, with an increment of 9.2 p.p., having changed from 14% to 23.2%.
In addition to that, the public sector participation in construction industry fell by 12.5 p.p. in the period, with a changed from 43.2% in 2009 to 30.7% in 2018. The segment of Infrastructure works, which always counted on a significant participation of the public sector, recorded the most significant decrease, from 61.5% to 50.4%, in the period. The segment of Building construction fell from 28.6% to 21.9%, which placed the activity at a level close to that of Specialized construction services (19.3%), which fell by only 1.1 p.p. in the period.
From 2009 to 2018, construction industry lost almost 10% of its job posts
The results of PAIC 2018 suggest that the context of economic and institutional stability initiated in 2015 has not been completely overcome by construction industry, which was affected by that negative scenario that caused major investment decisions to be postponed and projects to be cancelled.
Construction companies used to employ a total 1,869,592 persons in the end of 2018, a figure about 9.0% below that of 2009 (2,053,443). In this period, the sector lost about 183,8 thousand work positions.
|Annual Survey of Construction Industry 2009/2018|
|43-Specialized construction services||408,710||615,331||754,656||715,263||776,108||778,874||751,584||656,397||663,019||619,897|
The peak of employment in the sector took place in 2013, with about 2,968 million workers. From that moment up to 2018, the loss of work positions reached 1,1 million, with a decrease by 37.0%. The reduction was most significant in the segment of building construction (43.0%, or 529 thousand jobs) and of infrastructure works (also 43.0% or 414 thousand jobs). In Specialized Construction Services, there was loss by 20.1% (or 156 thousand jobs).
Between 2017 and 2018, Construction industry lost 31,502 work positions, which is equivalent to -1.66%. The most significant decrease was that of Specialized construction services (by 43,122 jobs, or -6.50%). However, in the period, employment increased by 2.5% in the segment of Infrastructure works (or 13,374 jobs).
The profile of employment changed drastically in 10 years, making the composition more homogeneous in terms of activity. In 2018, 37.5% of the positions in the sector were found in building construction; 33.2% in specialized services; and 29.3% in infrastructure works.
Building construction was the activity that employed most persons in 2018, with a total 37.5% of the employed persons (versus 43.6% in 2009). Although the activity Specialized construction services remain as number two in the ranking, it recorded the biggest increase in participation, 13.3 p.p. in this period and accounting for 33.2% of the construction workers – versus 19.9% in 2009.
Infrastructure works have lost space in the composition of workforce since 2009, with a reduction of 7.2 p.p. in 10 years, from 36.5% to 29.3%. That activity also recorded a decrease in the size of companies, from an average of 92 persons, in 2009, to 43 persons, in 2018.
Between 2009 and 2018, the average compensation paid by infrastructure works fell from 3.4 to 2.8 minimum wages
As for salaries, the segment of Infrastructure works - historically having the highest average compensation - registered 2.8 minimum wages per month in 2018 (versus 3.4 in 2009), the biggest decrease in ten years, by more than one and a half minimum wages between 2009 and 2018 The segments of Building construction and Specialized construction services registered an average of 2.1 minimum wages, thus maintaining the same structure throughout the decade.
Almost seven thousand companies ended their activities in the last three years
The number of companies in the construction sector changed from 63,829 in 2009 to 124,522 in 2018. Nevertheless, a comparison with the peak of the time series, in 2015, when there were 131,318 companies, shows an increase of 5.2% (or by 6.8 thousand companies in construction industry).
|Annual Survey of Construction Industry 2009/2018|
|Number of companies|
|43-Specialized construction services||23,185||38,145||51,742||50,808||56,277||63,314||67,975||65,184||66,429||64,285|
The decreases occurred in the segments of Building construction (-4 thousand companies) and Specialized services (-3.7 thousand companies); the infrastructure sector alone had an expansion by apenas o segmento de infraestrutura by about one thousand companies.
Between 2017 and 2018, Construction Industry lost 1,736 companies, or -1.37%. However, among the segments, there was a decrease only in Specialized construction services (2,144 companies, or -3.23%). Small increases were observed in Buidling construction (by 384 companies or 0.82%) and in Infrastructure works (24 companies, or 0.19%).
Costs with personnel amount to 32.2% of the expenses of construction industry
The main item in costs and expenses of construction, both in 2009 and in 2018, was relative to costs with personell, with a change from 30.8% to 32.2%. Consumption of construction material recorded a decrease from 25.3% to 22.9% of the total. Works and/ or services contracted fell from 11.3%, in 2009, to 9.6%, in 2018. These two items reduced their participation in the last ten years due to the modernization of production, as well as to the new work relations, among other significant changes in the sector. The other categories accounted, together, for about 35.3% of the costs and expenses.
Among the products and/or services provided by companies with 30 or more employed persons, residential works - number three in the ranking in 2009 -, accounted for the biggest participation, with more than ¼ of the total in 2018. The construction of roads, urban construction works and special works (notably related to Infrastructure works) was formerly placed as number one in the ranking , but moved to the third position in 2018.
Participation of the South in construction industry recorded the biggest increase by Major Region
Between 2009 and 2018, although the Southeast region has reduced its participation, it remained in the leading position in terms of contribution to the value of real estate development, and construction works and/or services, with 49.2%, followed by the Northeast (18.7%), South (17.2%), Central West (8.7%) and North (6.2%). A highlight is the reduction of concentration in the Southeast, in favor of the South Region, which recorded a change of 5.2 p.p., and of the Northest Region, with an increase in participation of the Northeast Region, 1.9 p.p. in ten years.
The Southeast concentrated 48.2% of the volume of workers in 2018, being in the first position in the ranking. It is followed by the Northeast (20.4%), South (16.9%), Central West (8.3%) and North (6.2%). only the South Region recorded an increase ain participation against 2009, by 3.3 p.p. in the period.