Cement Sales in Brazil Experience Decline in 2023

In 2023, the Brazilian cement industry faced a challenging year, with total sales amounting to 62 million tons. This figure represents a 1.7% decrease, equivalent to 1.1 million tons less than the previous year, marking the second consecutive year of sales decline. The industry had previously seen growth from 2019 to 2021, even during the pandemic, but faced a 2.8% decline in 2022.

The high interest rates throughout 2023, starting at 13.75% and closing at 11.75%, significantly impacted the final cost of mortgage financing. This led to a shift towards investments in financial products and had a strong impact on production costs. The real estate sector, a major driver of cement consumption, experienced a significant drop in new launches, contributing to the negative performance in 2023. Data up to September indicated a 16% reduction in new developments and a 6.5% increase in property sales, reducing the stock of construction projects and, consequently, the demand for cement.

Despite the resumption of the "Minha Casa Minha Vida" housing program in February, its regulation only occurred in June, delaying its impact until the second half of the year. The program's share in new launches increased from approximately 30% to 46% in the third quarter.

The recovery of the job market and the reduction in unemployment did not translate into equivalent wage growth, with salaries remaining at pre-pandemic levels. This stagnation reduced the purchasing power of the population, reflected in the high level of household indebtedness, which reached 47.7% in September, and record delinquency in 2023.

Source:
capivaranews.com