| Work Detail |
Public works: due to the fiscal adjustment, the Government will only finance projects that have at least 80% completion.
Construction businessmen met with Luis Caputo to find out what the budget for the sector will be. They estimate that there were up to 60 thousand layoffs due to the slowdown in activity in recent months
The Government told a group of construction businessmen that the plan to sharply adjust the fiscal deficit will only leave room for public works projects to continue operating that have at least 80% progress, which according to private sources would barely represent the 5% of the total. In the sector, they assure that activity has practically stopped completely throughout the country and that due to this situation, layoffs have already been recorded for between 50 and 60 thousand employees.
The Minister of Economy Luis Caputo met last Thursday with businessmen from the Argentine Chamber of Construction (Camarco), days after the departure of Guillermo Ferraro from the Ministry of Infrastructure and who was in charge of infrastructure works policy during the first 45 days of libertarian government. The disarmament of Infrastructure favored Caputo, who became the central interlocutor with the private sector linked to construction. The ministries of Public Works, Housing and Transportation are expected to be placed under the Economy wing.
The businessmen took as their central conclusion that the priority for the economic team will not be the financing of infrastructure works but rather not moving away from or endangering the goal of zero deficit in public accounts this year. One of its victims will be funding from the State to contracting companies. At a first glance at the Caputo plan, this spending item should explain 0.7% of GDP - of the 5 points in total sought by the Casa Rosada - but the fall of the omnibus law could close the budgetary faucet even more for that sector.
Among the companies in the sector, they assure that activity “is practically stopped throughout the country,” according to what an executive who is a member of the chamber told Infobae. The entity declared a state of emergency for public works two weeks ago and warned that it would have an imminent impact on the viability of companies and the continuity of jobs. Another businessman with a seat on the chambers board of directors assured that in the last "two or three months there were layoffs in the order of between 50,000 and 60,000 people."
The businessmen took as their central conclusion that the priority for the economic team will not be the financing of infrastructure works but rather not moving away from or endangering the goal of zero deficit.
The official data are lagging and still do not reflect that labor reality. The Indec reaches November and shows that some 460,309 employees made up the total payroll of the sector, some 12 thousand less than three months before. In companies, in any case, they assure that the most notable impact in terms of jobs was noticed starting January 10, when every year they usually resume activity on the construction sites after the workers return to the production locations. the works after the break for the end of the year festivities.
Businessmen in the construction sector warn that activity is "practically stopped throughout the country."
The expectations of businessmen in the sector worsened noticeably after the change of government. The latest survey of construction executives that accompanies the activity report carried out monthly by Indec showed that 77% of the businessmen consulted believe that in the next three months the pace of work on public works projects will decrease. Two months ago that proportion was 44 percent.
However, during the meeting with Caputo, the businessmen of the sector suggested to the minister that in addition to financing the continuity of the projects, the chamber seeks that the Treasury Palace enable payments for unpaid work certificates, a debt that private sources estimate in the $350,000 million. It is not an amount, they admit, much above a historical average, but the Camarco offices fear that the harshness of the fiscal adjustment will make these liabilities difficult to collect.
The Minister of Economy promised that before giving the green light to these payments, he will seek to complete a budget audit ordered by the new government administration to clear the final amount of debt accumulated by the treasury. A central point of the meeting had to do with the discussion regarding which works that have already been completed to some degree will be able to count on public funding and which will not.
The businessmen consulted by Infobae agreed that the message that came from the Executive Branch was that the works that could have some type of budgetary financing will be those that have a level of progress of 80% or greater. Private sources estimate that it would be just 5% of the works started. The fiscal restrictions will determine whether or not Economía finally grants this funding to the contractors.
Another issue that worries construction leaders is that the Government could redirect financing that comes from international organizations and that had infrastructure projects as their objective towards the reinforcement of social assistance programs, a measure that was anticipated by Infobae and that was crystallized as part of the conversations that the officials had with the staff of the International Monetary Fund.
Caputo would absorb the Secretariat of Public Works that belonged to the ministry of Guillermo Ferraro
Caputo would absorb the Secretariat of Public Works that belonged to the ministry of Guillermo Ferraro
The Government would look for alternative sources of financing for spending and hopes to be able to “rebalance” the pace and destinations they have the disbursements of regional organizations and banks to give priority to social spending (basically the Universal Child Allowance and the Alimentar Card) in a context of very high inflation and a drop in activity. Prioritizing expenditures on social programs would put public works in the background.
The message that came from the Executive Branch was that the works that could count on some type of budgetary financing will be those that have a level of progress of 80% or greater
"The authorities have received guarantees from the multilateral development banks (World Bank and IDB) and regional development banks, which are also considering shifting their portfolio toward loans for quick-disbursing projects in order to finance greater social assistance,” the IMF confirmed in its report.
Construction is, possibly, the sector with the worst prospects for 2024 according to private projections. “We hope 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, it is likely that this decline will be less pronounced in the next month, given that many of its repercussions were already manifested during December,” LCG estimated.
Meanwhile, for Abeceb, the “brake of public works without private/international financing, the uncertainty due to the continuity of low-profit works and the increase in costs due to the jump in the exchange rate,” will weaken the pace of a decisive sector in terms of employment.
Camarco, in the statement in which he declared the state of emergency for the sector, stated that “the sector cannot endure more than a few weeks in these conditions” and urged that the national and provincial governments take measures to “temporarily mitigate the situation.” extreme crisis that the sector is going through. "This is the only alternative to prevent the destruction of the productive fabric of the sector and more than 200,000 layoffs." |
