Brazil’s construction sector is facing a troubling surge in inflation, with the latest data showing a significant increase. The Construction Industry Index from the Getúlio Vargas Foundation (FGV) reported an annual inflation rate of 5.23% in September, up from 3.21% a year ago. The October report is set to be released on October 28, revealing further inflationary trends. Despite stable prices for construction materials, recent analyses suggest that this stability may be coming to an end.
Analysts at Itaú BBA have observed a gradual rise in material costs that could have a notable impact on companies focused on low-income housing projects, such as those under the Minha Casa, Minha Vida (MCMV) program. The National Construction Cost Index (INCC) recorded a 0.61% monthly increase in September, a slight decrease from August’s 0.64% rise.
Cement Price Increases in Brazil
In cities like São Paulo and Porto Alegre, cement prices have seen modest increases, signaling potential changes in the market. Supply chain disruptions and rising commodity prices, influenced by Chinese stimulus measures, are driving these price hikes and could hinder growth in the sector. Despite an idle capacity in Brazil’s cement industry, sales are on the rise, leading to further price adjustments.