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Due to its multiplier effect on the economy, construction is the second most important activity in the country due to its level of employment and the fourth due to its contribution to the formation of the gross domestic product (GDP).
It does not contribute with foreign exchange because it does not participate in exports, although it attracts foreign investors at times, and it does require dollars to import machinery and supplies, but it compensates with added value and job creation.
This productive chain, which mobilizes a large number of related goods and services activities , generated 1.17 million direct and indirect jobs nationwide (9.61% of the total) and almost $726,000 million of gross added value. (6.41% of the total) last year, according to data from the Ministry of Economy.
An additional characteristic of this sector is that for capital it is a refuge of value in times of financial uncertainty, since many rental projects attract small and medium-scale investors, in addition to traditional developers. Betting on the brick, which moves around the dollar, has always been a safe option for savers.
Public works as an engine of development
On the other hand, and beyond private investment, the production chain is influenced by investment in public works, both for civil works and housing plans at the federal level, which provide opportunities for construction companies, SME suppliers and demand for employment in their areas of influence.
This state investment policy of the Ministry of Public Works has 5,014 works in execution and 979 projects distributed in the 23 provinces plus CABA, which allowed reaching 1,501 of the 2,311 local governments in the country.
In the last Situation Report on Labor and Public Works , published by that portfolio in May, it is highlighted that until March there were 420,279 registered jobs in construction, which implies 18.4% more than in the same month last year and 60,504 posts more than in March 2020 (first month of the pandemic).
"Currently there is a record of 450,000 jobs in the construction sector, but we aspire to reach 500,000 , all formal, quality and well paid, which represent what has been happening in the construction sector", he declared. Minister Gabriel Katopodis last week following the presentation of 7 of the 120 strategic works of the Argentina Grande program, which involve $71,000 million of state investment.
One of the three joint ventures with the highest increases
And also, due to the high level of unionization of its workers, most of whom are affiliated with the UOCRA , the levels of informality are reduced, they have unified occupational safety and hygiene conditions and participate in collective labor agreements.
In fact, in May the 2022 joint venture was closed with an increase of 62% (the same as Commerce and Gastronomy ) in 8 sections, agreed between the union led by Gerardo Martínez and the business chamber, and with a review agreement in November.
Unlike other production chains, which depend on many variables, to know how the construction activity is doing there is a key indicator that all analysts use: Portland cement shipments.
For example, last May , 1,104,100 tons were sold in the country, which represents a year-on-year increase of 24.5% . The input that grew the most, however, is reinforced concrete (54%), while the 19.2% increase in the apparent consumption of asphalt accounts for the evolution of public road works.
When investment in public works is interrupted and many projects are paralyzed, these indicators show dramatic drops, but shortly after they resume or when new ones emerge, the increases are automatic and constant.
Activity grew almost 20% year-on-year in May
The Construya index , created in 2002 by a group of 12 leading companies in the sector, is also a valuable indicator to reveal the level of activity and evaluate recovery in the dispatch of materials.
In June, it registered a seasonally adjusted monthly variation of 3.4% compared to the previous month and 4.9% compared to the same month last year, closing the first half of 2022 with an accumulated 9.1% above the same period of 2021 .
In the first quarter of 2022, construction activity grew by 3% compared to the same period last year, generating a gross value added of $2.4 trillion and gross fixed capital formation of $4.43 trillion at current prices.
The last available record of the INDEC for May 2022 shows that the synthetic indicator of construction activity (ISAC) rose 19.9% ??compared to the same month in 2021.
The seasonally adjusted series index shows a positive variation of 0.4% compared to last April and the trend-cycle series index registers a positive variation of 0.8%.
Thus, the accumulated of the first five months of the current year of the ISAC presents a rise of 6.3% compared to the same period of 2021.
Private sector workers reach 470,000
Regarding the level of employment, the latest data available from INDEC corresponds to April and accounts for 420,608 jobs registered in the private sector, with a year-on-year variation of 17.9% for the aforementioned month.
The area authorized by building permits, granted for the construction of private works in a list of 176 municipalities, was close to 1,392,000 square meters, with an interannual variation for April of 0.8%.
The president of the Argentine Chamber of Construction (Camarco), Gustavo Weiss , in statements to the Télam agency , estimated that the sectors activity grew between 6 and 7% in the first half of the year and clarified that employment continues to grow month by month. month to currently reach 470,000 positions, both in daily and monthly staff.
The business leader also commented that some construction companies have difficulties at the country level to hire specialized labor, with experience, technicians, foremen and engineers, although in many enterprises salaries are paid above the parity of the sector.
The global situation and the local macro and microeconomic impact on this activity as in the others, but also have a strong impact on the interest rate and the exchange rate, the low supply of mortgage loans and the debated rent law, the ups and downs of the work public, among other variables.
Survey of short-term business perspectives
The results obtained by the qualitative survey of construction, carried out on large companies in the sector, show favorable expectations regarding the level of activity expected for the June-August period, whether they are dedicated to carrying out mainly private or public works.
Indeed, 62.7% of the companies that mainly carry out private works anticipate that the level of activity in the sector will not change during the next three months, while 28.8% estimate that it will increase and 8.5% that it will decrease.
The companies that foresee a rise in the level of activity during the next three months attribute it, above all, to new public works plans (27.4%), to the growth of economic activity (25.5%) and to the restart of paralyzed works (19.6%) , among other factors.
Among the companies dedicated above all to public works , 56.6% believe that the level of activity will not change during these three months, while 31.6% believe that it will increase and 11.8% that it will decrease.
Those who estimate a rise in the level of activity during the next three months attribute it to new public works plans (39.6%), the restart of slopes (21.5%) and the growth of economic activity (19.4 %), among other reasons.
Source: Politics and Media |
