| Work Detail |
In the last month of the year, the item fell 12.2 percent. Materials had an increase of almost 300 percent in twelve months, according to Indec
The cost of construction increased by 33% in December and threatens to have a strong impact on the activity of the sector. According to the index of the Argentine Chamber of Construction, in the last month of the year, materials had an increase of 41.50% and labor, 11.40 percent.
The December numbers represent a very marked acceleration compared to November, when the cost of construction had increased 17.20%, while materials increased by 19.60% and labor by 11.20 percent.
According to sector sources, this index will have an impact on activity, which is already experiencing a contraction according to official figures, in a context of funding for public works that will be strongly restricted by decision of the national government to reach zero deficit this year.
The cost of construction increased by 33% in December and threatens to have a strong impact on the activity of the sector, with a 41.5% increase in materials.
The CAC index, for example, is the one used to value the costs of public works projects, some rentals and private contracts, mainly as a mechanism for updating construction contracts.
Indec had reported, for its part, that the general level of the Construction Cost Index (ICC) in Greater Buenos Aires corresponding to December had registered an increase of 30.1% compared to the previous month. This result arises as a result of an increase of 48.3% in the “Materials” chapter, 9.9% in the “Labor” chapter and 21.3% in the “General expenses” chapter.
Public works costs will increase in relation to construction cost indices. EFE
The costs of public works will increase in relation to the construction cost indices. EFE (EPA) EFE
The increase in construction materials, in annual terms, was 297 percent throughout 2023. That of labor - which includes the cost of masonry and structure labor, and the subcontracting of plastering, painting, sanitary installation and fire protection, gas installation and electrical installation - was 151.8%, while in general expenses the accumulated increase for the year was 192 percent, the latter two below of general inflation.
Meanwhile, Indec reported this Tuesday the construction activity index for the last month of 2023. In December there was a drop of 12.2% compared to that month of the previous year. And cumulatively for the entire year, the decline was 3 percent. In that report, increases were observed in the accumulated during 2023 of 8.3% in granitic and calcareous mosaics; 3.6% in paints; 3.5% on the rest of the inputs (includes faucets, seamless steel tubes and glass for construction); and 0.6% in manufactured concrete.
According to sources in the sector, this index will have an impact on activity, which is already experiencing a contraction according to official figures, in a context of funding for public works that will be strongly restricted.
Meanwhile, drops of 11% were recorded in sanitary items of ceramics; 9.8% on ceramic floors and coverings; 9.1% on asphalt; 7.6% in hollow bricks; 7.4% in plaster; 6.6% in limes; 6.1% in round iron and construction steels; 3% in Portland cement; and 1.2% in plasterboard.
Regarding the expectations of the sector, among those who mainly carry out private work, 40.8% anticipated that activity will decrease during the first quarter, against only 6.1% of those surveyed by Indec who anticipated an improvement, while that the remaining 53.1% did not anticipate major changes. Meanwhile, among those who carry out public work, 77.4% estimated that the activity will decrease, compared to 2.8% who considered that there will be an increase, while 19.8% did not anticipate changes.
A report from the consulting firm LCG stated that they expect that “the downward trend in the construction sector, which intensified during the last month of last year, will persist. The suspension of public works and uncertainty are having a direct impact on this activity. However, this decline is likely to be less pronounced in the next month, given that many of its repercussions have already manifested themselves during December,” he mentioned. |
