Construction Material Sales Decline continues in Argentina
In December 2024, sales of construction materials in Argentina fell by 6.6% year-on-year and 1.2% compared to November,according to the Construya Index. This index tracks the volume of products sold to the private construction sector by member companies. The overall sales for the year were down 27.2% compared to 2023, attributed to the cessation of public works and rising costs in dollars, which have hindered new projects.Experts suggest that recovery will be slow, relying heavily on the revival of private construction driven by increased mortgage lending and investment in real estate.
Time.news Interview: The Decline of Construction Material Sales in Argentina
Editor: Today we discuss a pressing issue in the Argentinian construction sector— the notable decline in sales of construction materials. With us is Dr. Laura Sanchez, an expert in construction economics. Welcome, Dr. Sanchez!
Dr. Sanchez: thank you for having me. It’s a pleasure to discuss the current state of the construction industry in Argentina.
Editor: We recently saw that in December 2024, construction material sales fell by 6.6% year-on-year and by 1.2% compared to November. What factors are driving these declines?
Dr. Sanchez: The downturn can be primarily attributed to two major issues: the cessation of public works and the soaring costs in dollars. As the government has reduced its investments in public infrastructure projects, manny suppliers have seen a significant drop in demand, leading to a 27.2% decrease in overall sales for the year compared to 2023, according to the Construya Index.
Editor: That’s a considerable drop. How do rising costs in dollars specifically affect the construction industry?
Dr. Sanchez: Rising costs in dollars affect everything from the price of raw materials to transportation. It’s particularly challenging in an economy like Argentina’s,where inflation is rampant. Contractors and builders face difficulties because they can’t pass these costs onto consumers without losing their competitive edge. Consequently,many projects are stalled or canceled altogether.
Editor: What implications do these sales declines have for the construction sector’s future in Argentina?
Dr. Sanchez: The implications are profound. A prolonged decline can lead to a loss of skilled labor as workers may seek employment in other sectors. It also stifles innovation and modernization within the industry. Experts suggest any recovery will be slow and will depend heavily on the revival of private construction. Increased mortgage lending and investment in real estate will be critical for stimulating demand and regaining momentum.
Editor: What practical steps can stakeholders in the construction industry take to navigate this crisis?
dr. Sanchez: Stakeholders should focus on diversifying their portfolios by exploring opportunities in private developments, which are likely to revive more quickly than public projects. They should also seek to establish stronger relationships with financial institutions to secure better lending options for potential buyers. Additionally, innovation and cost-efficiency will be essential—investing in sustainable materials and technologies can definitely help minimize costs in the long run.
Editor: As we look ahead, what do you foresee for the construction sector in the next few years?
Dr. Sanchez: While the current outlook is concerning, I believe that a rebound is absolutely possible. If mortgage lending increases and there’s a renewed interest in real estate investment, we could see a gradual recovery. A projected average annual growth rate of 4.6% in the construction industry from 2026 to 2028 suggests that with the right policies, Argentina can turn the corner. However, this won’t happen overnight, and collaborative efforts between the government and private sectors will be crucial.
Editor: Thank you for your insights, Dr. Sanchez. It’s clear that while the challenges are significant, there is potential for recovery in the Argentina construction industry.
Dr.Sanchez: Thank you! It’s essential for all industry players to stay informed and adaptable during these uncertain times.