High cost should remain until 2021 in construction material

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posted on 10/25/2020 12:39


(credit: José Varella / CB / DA Press – 13/2/9)

The increase in the costs of cement, steel, sand, wires, piping and other construction materials – which was evident in the resumption of the real estate business after the easing of the quarantine – should extend until the middle of the first half of next year and, thereafter , lose strength, according to industry experts.

For now, the upward movement remains in effect, as shown by the National Construction Costs Index (INCC) calculated by the Getulio Vargas Foundation (FGV).

INCC in October advanced 1.50% until the second decade of the month, showing an acceleration compared to 0.98% registered in the same period of September. As a result, the INCC reached 6.14% in the year and 6.44% in 12 months.

The pressure comes from the group of materials, equipment and services, with an increase of 3.04% in the second decade of October compared to 2.02% in the same period of September. In the year, the growth of this group reached 10.84% ​​and, in 12 months, it was 11.19%.

The overheating of these items is a reflection of a distortion in the relations between supply and demand, according to FGV researcher for the civil construction sector, Ana Maria Castelo. “There was an industry shutdown because of the pandemic and a very strong and rapid resumption of demand with the quarantine cooling. This caused a surreal distortion, never imagined before. The industry’s supply failed to keep up with demand at the same pace,” he explains. .

“Due to the imposition of the pandemic, the industry saw its production drop abruptly by about 50% in April and May. And immediately afterwards, it saw an abrupt resumption of demand, with the need to replenish stocks and a significant increase in production volumes,” he says. the president of the Brazilian Construction Materials Industry Association (Abramat), Rodrigo Navarro. The information is from the newspaper The State of S. Paulo.

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