Package provides extra energy to retail in construction
DCI 02/11/2009
The announcement of measures from the Federal Government to incentive the sector of civil construction - such as the reduction of the Excise Tax (IPI), the release of R$ 1 billion (US$ 435 million) from the Employment Security Fund (FGTS) and microcredit incentives to finance the purchase of building material - are cheering up the retailers of the sector. Besides, the Government has recently announced housing incentives, with the construction of 500 thousand popular houses as part of the Growth Acceleration Program (PAC), in addition to those to be financed by the Federal Savings Bank (Caixa Econômica Federal - CEF). This can be a potential market for building material retailers, because the unfinished houses force their owners to provide the flooring, tiles, and so on. Sources of the sector say the final cost of one of those houses ‑ on the average, of 40 square meters ‑ should be from R$ 30 to R$ 60 thousand (US$ 13/26 thousand). With these values, analysts believe there is no good finishing and that generates demand for repairs. The expectation is to stimulate the more than 100 thousand points of sale of the construction retail and cause impact in other markets. Claudio Conz, President of the National Association of Construction Material Retailers (Anamaco) and member of the group for the monitoring of the crisis, says these measures alone are not enough to move the economy. "The first measure the Government should take should be to provide exemption of IPI (Excise Tax) to almost one thousand items. The measure would take R$ 1.1 billion (US$ 478 million) from the Government in tax collection, but the reduction of prices generated by the tax release might assure growth of 1% in the 2009 gross domestic product (GDP)."For him, the construction of 500 thousand homes is a complementary measure of the Government. "It is necessary to have a guarantee fund to execute the work, because the money will be private. It is estimated there will be at least R$ 20 billion (US$ 8.7 billion) more in the economy".