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Sales of construction supplies fell 3.23% monthly and remain 24.8% below November 2023 - Infobae
Source:
www.infobae.com
December 06, 2024
A private report confirmed that activity is not picking up. Industry sources say that the fall of the dollar is making new projects difficult and that the increase in costs is affecting the continuity of the works.
By Jose Luis Cieri
High construction costs complicate the sector, which sells fewer supplies and endangers the start of new works (Illustrative Image Infobae)
According to data from the Construya Index (IC) , which monitors the evolution of volumes sold to the private sector, sales of construction inputs in November registered a seasonally adjusted monthly drop of 3.23% and were 24.8% below the level of November 2023.
The entity that groups together several factories in the construction industry indicated that in recent months sales have stopped recovering and that the market is seeking a new equilibrium. They point out that, with the resurgence of mortgage credit, they expect a gradual recovery of activity to occur starting next year.
The cumulative figure from January to November 2024 was 28.5% below the same period of the previous year. This factor confirms the decline in the pace of construction, evidenced by the existence of approved projects for new buildings in different cities that have not yet begun.
The IC measures the performance of products including ceramic bricks, Portland cement, lime, long steel, aluminum carpentry, paints, sanitary ware, boilers, faucets, materials for water and gas conduction, among others.
Construction costs are currently up 145% compared to last year , driven by the economic recovery under the new government, the rise in the prices of materials tied to the dollar —such as imported taps and flooring— and the cumulative impact of inflation (which has only started to decline in the last four months). The average cost is USD 1,400 per square meter for standard projects and exceeds USD 1,800 for premium projects.
Source: Construya Group
The construction materials market has registered a cumulative 30% drop in demand during the year, driven mainly by the contraction in public works and the loss of purchasing power of end users. Diego Aguirre , from Construyo al Costo, pointed out that these factors had a special impact on the sales channel to private consumers.
Aguirre stressed that, despite this scenario, there are signs of recovery in the private sector: “Developers have resumed projects thanks to the stabilization of the macroeconomic situation and the exchange rate, in addition to the recovery of the value of the square meter in a market that is already showing improvements in its level of activity. In addition, the return of mortgage credit is beginning to mobilize demand.”
In terms of costs, while material prices have remained stable over the past six months – with an average monthly increase of 1.7% – their year-on-year increase is still strong.
“This reflects significant adjustments made in 2023, especially in the last two months, where prices rose by more than 60 percent. This anticipation in the increases could explain the current moderation, but the accumulated impact still represents a challenge for the sector,” Aguirre said.
Patricio Rozenblum , from PBG Desarrollos, told Infobae that some developers took precautions by diversifying credit sources and managing exchange rate risks with flexible structures.
The fall in the dollar ( the free exchange rate has already fallen 30% since its peak in July ), they add from the segment, could strengthen the purchasing power of local buyers.
Companies in the sector sought greater flexibility in their debt and adjusted their financial schemes to a volatile context without compromising the development of works, most of which are still ongoing.
Source: Construya Group
The consolidation of the exchange rate and falling inflation, they say, could set the conditions for a more stable sales dynamic and the gradual reactivation of new ventures.
Rozenblum said: “The real estate market has a proven resilience in Argentina. Although there are signs of uncertainty in the short term, in the medium and long term the demand for housing and investment projects remains strong. Investors are looking to protect their capital in safe assets such as real estate, and that supports the sector.”
There is also confidence in the recent credits presented by the Government for divisible mortgages or future property, where projects can be financed through bank loans and the end user and investor can also buy a house in a pit through a mortgage plan, but its implementation is still lacking and will only be in the first quarter of 2025.
“In addition, the market has been able to adapt to fluctuations in the macroeconomic environment, which allows us to project sustained growth once some key variables, such as the exchange rate and inflation, stabilize,” concluded Rozenblum.
www.buysellba.com
Source:
La venta de insumos para la construcción cayó 3,23% mensual y se mantiene 24,8% por debajo de noviembre 2023
Un informe privado confirmó que la actividad no repunta. Fuentes del sector señalan que la baja del dólar dificulta nuevos proyectos y que el incremento de costos incide en la continuidad de las obras
www.infobae.com
December 06, 2024
A private report confirmed that activity is not picking up. Industry sources say that the fall of the dollar is making new projects difficult and that the increase in costs is affecting the continuity of the works.
By Jose Luis Cieri
High construction costs complicate the sector, which sells fewer supplies and endangers the start of new works (Illustrative Image Infobae)
According to data from the Construya Index (IC) , which monitors the evolution of volumes sold to the private sector, sales of construction inputs in November registered a seasonally adjusted monthly drop of 3.23% and were 24.8% below the level of November 2023.
The entity that groups together several factories in the construction industry indicated that in recent months sales have stopped recovering and that the market is seeking a new equilibrium. They point out that, with the resurgence of mortgage credit, they expect a gradual recovery of activity to occur starting next year.
The cumulative figure from January to November 2024 was 28.5% below the same period of the previous year. This factor confirms the decline in the pace of construction, evidenced by the existence of approved projects for new buildings in different cities that have not yet begun.
The IC measures the performance of products including ceramic bricks, Portland cement, lime, long steel, aluminum carpentry, paints, sanitary ware, boilers, faucets, materials for water and gas conduction, among others.
Construction costs are currently up 145% compared to last year , driven by the economic recovery under the new government, the rise in the prices of materials tied to the dollar —such as imported taps and flooring— and the cumulative impact of inflation (which has only started to decline in the last four months). The average cost is USD 1,400 per square meter for standard projects and exceeds USD 1,800 for premium projects.
Source: Construya Group
The construction materials market has registered a cumulative 30% drop in demand during the year, driven mainly by the contraction in public works and the loss of purchasing power of end users. Diego Aguirre , from Construyo al Costo, pointed out that these factors had a special impact on the sales channel to private consumers.
Aguirre stressed that, despite this scenario, there are signs of recovery in the private sector: “Developers have resumed projects thanks to the stabilization of the macroeconomic situation and the exchange rate, in addition to the recovery of the value of the square meter in a market that is already showing improvements in its level of activity. In addition, the return of mortgage credit is beginning to mobilize demand.”
In terms of costs, while material prices have remained stable over the past six months – with an average monthly increase of 1.7% – their year-on-year increase is still strong.
“This reflects significant adjustments made in 2023, especially in the last two months, where prices rose by more than 60 percent. This anticipation in the increases could explain the current moderation, but the accumulated impact still represents a challenge for the sector,” Aguirre said.
The falling exchange rate is a problem
Sources consulted indicate that fluctuations in the dollar have a diverse impact on the financing of projects linked to the currency.Patricio Rozenblum , from PBG Desarrollos, told Infobae that some developers took precautions by diversifying credit sources and managing exchange rate risks with flexible structures.
The fall in the dollar ( the free exchange rate has already fallen 30% since its peak in July ), they add from the segment, could strengthen the purchasing power of local buyers.
Companies in the sector sought greater flexibility in their debt and adjusted their financial schemes to a volatile context without compromising the development of works, most of which are still ongoing.
When could the sector recover?
Business chambers agree that, despite short-term uncertainty, housing demand and real estate investment remain on a solid footing in the medium and long term.
Source: Construya Group
The consolidation of the exchange rate and falling inflation, they say, could set the conditions for a more stable sales dynamic and the gradual reactivation of new ventures.
Rozenblum said: “The real estate market has a proven resilience in Argentina. Although there are signs of uncertainty in the short term, in the medium and long term the demand for housing and investment projects remains strong. Investors are looking to protect their capital in safe assets such as real estate, and that supports the sector.”
There is also confidence in the recent credits presented by the Government for divisible mortgages or future property, where projects can be financed through bank loans and the end user and investor can also buy a house in a pit through a mortgage plan, but its implementation is still lacking and will only be in the first quarter of 2025.
“In addition, the market has been able to adapt to fluctuations in the macroeconomic environment, which allows us to project sustained growth once some key variables, such as the exchange rate and inflation, stabilize,” concluded Rozenblum.
www.buysellba.com
