Ômicron, high interest rates and lack of inputs worry civil construction

The construction sector begins the year 2022 with a package of concerns with the potential to keep the sector’s growth in the range of 2%, a lukewarm advance compared to the 8% estimated for 2021, informed this Thursday (13) the Sinduscon-SP (Civil Construction Industry Union in São Paulo).

Despite the positive results recorded last year, the entity’s president, Odair Senra, says he considers that the “robust recovery of the economy and post-pandemic activity” was lacking. Also lacking, according to him, were major structural reforms capable of attracting investment.

The arrival of the election year, on the one hand, weakens the political climate for reforms, but, on the other hand, results in an effort to carry out infrastructure works in the states, which is seen as positive by the sector.

Eduardo Zaidan, vice president of economics at Sinduscon-SP, says that, for the time being, the ômicron variant – which is attributed to the expressive increase in positive cases of Covid-19 – has not yet reached the construction sites, but it worries the sector. possible effect on the supply of raw materials.

“It’s still difficult to measure the real impact on the works today, January 13, because many people left for the end of the year and haven’t returned yet. For now, the variation in the construction sites is not as great as it was in March and April 2020, when we got to 30% [dos trabalhadores] away”, he says.

The cost of raw materials and the scarcity of materials and equipment still haunt the construction industry. “It is still too early to assess this impact, but it is another factor to hinder productivity. There is still excessive delay in deliveries”, says Zaidan.

The leader says that despite there being deflation in many products used in the works, for the market there was only a stabilization at a lower level. That is, the price fell from the peak, but did not return to the pre-pandemic level.

Some products, such as ceramics, still take around 90 days to be delivered. Before the disruptions in supply chains with the beginning of the pandemic, the wait was up to 30 days and there were even those who had product in stock. “We still suffer a lot from the disorganization of logistics”, says the vice president of economics at Sinduscon-SP.

For this year, Zaidan says that the construction companies have contracts to fulfill, which should keep the sector’s activity at a good level.

The real estate market sold well in 2021, still reaping the rewards of low interest rates, which increased credit conditions for buyers. The thousands of properties launched and sold in the past year will now be built. What comes after this cycle is no longer so clear for the sector.

Until November, the most recent data compiled by Secovi-SP (housing union), 66 thousand residential units had been sold in 12 months, up 33.6% over the previous year.

For Ana Maria Castelo, project coordinator for the construction of the FGV/Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas), the rise in interest rates, the fall in the average Brazilian income and the greater perception of uncertainties are factors of attention in the activities construction this year.

Another stress factor for construction has been the lack of qualified labor, which may require investment from companies. “It may seem a paradox to lack labor when there is so much unemployment, but it is an issue that will affect the dynamics of cost”, says the researcher.

Formal employment in civil construction accumulated 245,900 jobs created in the 12 months to November 2021, equivalent to 8.7% of last year’s positive balance. Despite the improvement in registered positions, there was a drop of 8.7% in real income.

For Ana Maria Castelo, this reduction reflects the same dynamics of the labor market as a whole, in which the increase in informality reduces unemployment, but also flattens wages. At least part of this informality in construction comes from domestic works, which the sector calls self-construction.