According to Estadao newspaper, Brazil retail sales of construction material fell 7% in October compared to the previous month, according to a survey conducted monthly by the National Association of Construction Material Dealers (Anamaco). The result marks the first monthly decline this year. In a statement, the president of Anamaco, Claudio Conz said in October that these results surprised everyone in the market, because usually this is one of the best months for the retail sector. In view of this scenario, the entity cut again its projected sales for 2011.
In the categories surveyed, cement had the biggest drop in sales, with 7.3%. Metals and mortars price also declined by 6%. In Claudio’s opinion, “the industry must work hard to reverse the trend.”
That might explain the gross margins improvement at Eztec in the last quarter. So the results above can be either good or bad news for the homebuilders:
Good: a drop in construction costs means an improvement in profit margins
Bad: a drop in construction costs shows early signs of a massive real estate market slowdown.

What is your opinion?
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