Brazil Construction Costs Hold in October as Confidence Weakens and Materials Prices Rebound

Overview

• INCC-M rose 0.21% in October for a second month, lifting the 12-month rate to 6.58% from 5.72% in September, according to FGV Ibre.
• Materials and equipment prices accelerated to 0.29% from a 0.05% decline, with structural materials reversing to 0.34% from a 0.28% drop.
• Labor-cost inflation slowed sharply to 0.13% after collective bargaining in capitals, and services eased as electricity charges turned negative.
• The Construction Confidence Index fell 0.7 point to 91.6, driven by a 1.4-point drop in expectations to 91.5 while the current situation component held steady.
• Capacity utilization increased 1.2 points to 80.0% as labor and machinery use also rose, and FGV analysts flagged a cooler growth pace with potential support from Minha Casa, Minha Vida and infrastructure investment.