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The sector has not been able to consolidate its recovery, largely due to the slowdown in public works but also due to the effect of the “cheap dollar” on private construction.
While the government celebrates the end of the recession, some key sectors of the economy still have one foot in the mud and the other trying to step more firmly on the ground of recovery. This is the case of one of the main drivers of the economy: construction. Even without official data for the last few months - the last INDEC record is from August - some preliminary indicators, considered "primary indexes" of activity, continue to fluctuate in that grey area that does not allow us to venture a recovery but rather a prolonged suffering.
But the data can hide different realities, as is the case with the statistics on cement shipments released yesterday by the Portland Cement Chamber. This number usually anticipates the evolution of construction activity, a decisive sector in the performance of the economy. After an unexpected rise in July, when everything seemed to indicate that this sector would also boost the reactivation, cement sales fell again in the following months. August was negative, September rebounded and, as confirmed by the entity yesterday, a new decline was detected in October. In the interannual comparison, cement shipments fell 20%, they fell 1.1% against the previous month and have accumulated a fall of 26.2% so far this year. A bad forecast for the next activity indices.
However, it could be a fall with mitigating factors. This is according to the Chamber of Construction, which breaks down this survey between the material shipped in bulk, destined mostly for public works, and the packaged material that is normally used in private works. According to these records, although the same dynamics continue in sawdust, the evolution of bagged shipments (for private works) indicates a much smaller impact on the sector than the consolidated data suggests, highly impacted by the slowdown in public works. Packaged cement fell 11.2% while in bulk the fall exceeds 27% in the accumulated year compared to the same period last year.
Another sectoral index that measures the evolution of the volumes sold to the private sector of construction products, the Construya Index (IC), also registered a seasonally adjusted monthly drop of 5.43%, and remained 22% below the level of September 2023. At the same time, the latest official data from INDEC, somewhat behind since it is from August, confirms that the sector is finding it harder than others to recover (it recorded a drop of 2.9% against the previous month and 26% year-on-year).
Not only the slowdown in public works threatens the recovery of the sector. Nor does the “cheap” dollar contribute to reviving it, with the paradox that the last positive number for the sector was detected when the exchange rate gap temporarily widened. With these figures, construction is the great engine of the economy that, for the moment, seems to be driven by other sectors. “Clearly construction is weighed down (by) the increase in the cost in dollars and minimal public works, among others. On the other hand, you have durable consumption, which is what rises strongly with credit and relative cheapening,” said economist Gabriel Caamaño.
In fact, the main private surveys, such as those by Orlando Ferreres, EcoGo, Equilibra and also Econviews, anticipate a positive evolution of activity in September compared to the previous month, which will mean closing the third quarter of the year on a positive note. Even consumption began to show signs of recovery and gave President Javier Milei cause for great celebration over the weekend when CAME announced the year-on-year increase in retail sales for the first time in almost two years.
“Our activity traffic light shows many more greens than reds. Consumption showed some signs of awakening in August, and sales expectations are encouraging for the following months, helped by credit that continues to grow in double digits. There were also good industrial data such as steel production and energy consumption, and consumer confidence rose 8.8% in October. Construction remains complicated, but in general we see activity in September growing somewhat more than in August,” explained Econviews. |
