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Building in Argentina is increasingly expensive. According to a report carried out by the Association of Construction SMEs (Apymeco), building one m2 already costs more than one million pesos and costs continue to rise above general inflation.
In detail, the m2 of construction reached a value of $1,161,766 in February, without including VAT (10.5% is charged on labor and 21% on materials), the incidence of the land, the costs of the legal figure of entrepreneurship or the benefit of development. With this, the m2 reached an increase of 288.4% compared to the same month last year, when the m2 had a value of 299,087 pesos.
It should be remembered that in that same period (February 2023 vs February 2024), the Consumer Price Index had an increase of 276.2%. From this it follows that the cost per m2 became 12.2 percentage points more expensive than general inflation in the last year.
Now, is the value of $1,161,766 cheap or expensive? It is a difficult question to answer, but an approach to the answer can be obtained by analyzing the evolution of the m2 measured in dollars. According to the study carried out by Apymeco, both at the official value and at the blue value, the cost per m2 has become more expensive in recent months.
Evolution of prices per square meter
Evolution of prices per square meter
Taking the exchange rate regulated by the Government as a reference, we obtain that the value of the m2 of construction is USD 1,303.24. Two months ago, it was close to USD 1,100.
If, however, the parallel quote is taken into account, it follows that the cost per m2 is USD 1,167.60. In that case, the price has been rising steadily since September 2023, when the value was around USD 500.
Deceleration in February
Analyzing only the evolution of the cost per m2 in February 2024, a slowdown in price increases is observed, sustained during the last two periods. Specifically, in February the m2 increased 8.10%, against 11.68% in January and 29.81% in December.
“This decline is justified by the strong recession reflected in the construction activity indices, especially due to the paralysis of public works,” explained Apymeco.
According to the study, what became most expensive in the second month of the year was labor, which had an increase of 13.79% compared to the previous month. They were followed in descending order by general expenses (10.2%), third party supplies (6.55%) and materials (5.74%).
Construction materials increased 5.74% in February (Reuters)
Construction materials increased 5.74% in February (Reuters)
Regarding materials specifically, the report highlights that the most pronounced increase occurred in limes , which became 34.17% more expensive. The rise in marble and granite (15.56%) and ceramic bricks (9.59%) was also significant.
Strikingly, there were three materials that did not present any variation during the second month of the year. These are taps, sanitary fixtures and wood carpentry, although the three items had had pronounced increases in the previous months.
Downward sector
As indicated by Apymeco, the construction sector is not having a good time. In fact, the latest official statistics published by Indec show that activity in this sector fell 21.7% in January.
Another proof of the decline in activity is the contraction in the amount of labor employed. The construction industry in Argentina lost more than 80,000 jobs since last December: of the 440,000 workers that there were last July, they were reduced by 11% until the end of the year, 18% in January and 20% in February , and it is estimated that in March "they will continue to decline given that none of the causes that motivated the fall have been reversed."
Source: https://www.infobae.com/ |
