Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
DIY; Gardening
Executive summary
Construction Credit Lines Almost Double
Credit for house construction increased from both public and private finance
institutions. In light of these developments and with the intensification of
new housing construction and expected boost to civil construction, consumers
demand may expand, with people acquiring new DIY and gardening products or
even replacing old ones.
Tax Reductions Aim to Decrease Prices, but Do They?
In 2006, the Industrialised Products Tax provided a full tax exemption for 13
construction products and another 28 had their rates decreased. However, the
high price of metal commodities in the international market, growth in
construction and lack of competitiveness pushed up the price of some
construction products, keeping the tax reduction from having a more
significant impact on consumers. Although not being passed along to final
consumer prices, these tax exemptions will benefit producers that might feel
more attracted to develop investments in this area and grow their production
capacities.
Government May Make Cement Market More Competitive
In order to increase competition, Brazil' s Administrative Council for Economic
Defense (CADE) recently recommended that the Ministry of Development reduce
import taxes on white cement. The Economic Law Secretariat also instigated a
cartel investigation into white cement producers. If convicted, companies will
pay a fine of 1-30% of their incomes in 2005. The prospect of a conviction
might reduce the value of open-market companies that have negotiated stocks.
More importantly, the threat of convictions and a reduction of import taxes
have a high probability of making the market more competitive. As a result,
consumers may benefit as they will have access to a broader range of
international products that are currently limited due to the high import
tariffs.
Higher Disposable Incomes May Increase Demand
DIY and gardening products could benefit from higher disposable incomes that
have been seen in Brazil since the new government took over. This is
especially important in traditionally poorer regions of the country, such as
the North and Northeast, where government funds transfers (the so-called
"Family grant") is improving consuming conditions. These consumers may be
tempted to greater consumption of DIY products.
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