The thermometer indicates that the temperature in the sector shows signs of improvement. The demand for inputs for construction reflects a growth that shows the reality of this industry. According to a consultancy report Keys Competitive Information, the item “has been showing a strong recovery in the last two years, offsetting the deterioration that was observed as of 2018.” This trend is associated, in part, to the increase in investment in public works and to greater private demand, which seeks to take advantage of the drop in costs in dollars, the survey stands out.
Nicolas Kornfrom the developer Korn, details that, “post pandemic, the country’s economy has been hit in many areas. The demand for inputs was increasing, but the supply of these has been lower each year, due not only to increased prices, but also to customs problems to import these products, such as faucets, elevators, various construction materials ”. This is not a minor fact, since the builder points out that, in addition to increases, this type of material suffered “shortage”, which “generated inconveniences in the different works in progress as well as having an impact on prices, generating a 9% rise in May. A clear example is the delay in the delivery of elevators and windows ”, he affirms.
signs. In this context, the sector exposes its vital signs intact. “When analyzing the dynamics of production, taking into account the ISAC published by the INDECa rise of 0.7% was registered between 2018 and 2022. In disaggregated terms, it can be seen that plasterboard was the input that increased the most, increasing by 14.6% between 2018 and 2022, while hollow bricks and cement showed an increase of 12.3% and 9.1% in the same period”, the Claves report expands.
Martin Carísimoregional manager of Bercomat family, confirms this scenario: “Sales have remained constant even after the pandemic, with an increase in investment in construction and homes. The devaluation of the peso has also increased the demand for this type of product, which makes it a safe investment to protect assets”.
According to Claves, the growth dynamics was “heterogeneous” in recent years, although “it showed a deterioration between 2018 and 2020, and a strong recovery from 2021.” “In 2022 and 2021, construction experienced an increase of 30.9% and 3.5%, respectively, offsetting the fall of previous years. This is due to various reasons, such as the greater internal demand that took advantage of the strong weakening of the peso and the reduction of the cost in dollars, and the increase in real direct investment from the national public sector”, he points out.
In relation to internal prices, it can be seen that they have experienced a strong rise in recent years, growing at a higher rate than the general level of values in the economy. “The item of the construction cost index ‘construction materials’ published by INDEC registered an increase of 69% in 2022 (taking average values), accumulating a rise of 1,316% between March 2023 and December 2017. In this way, it extended above the general CPI of the economy, which increased by 72.4% in 2022 and 1,006.7% since March 2023 and 2017”.
factors. “Inflation and transportation costs are other factors that have caused the prices of materials to accumulate a rise of more than 27% so far this year, reaching more than 100% year-on-year,” explains Korn. , which, from his point of view, “causes construction activity to slow down, contracting by 6% in the first quarter of 2023.” “Wood, steel, aluminum, iron or PVC are some of the materials affected in price and supply. In addition to tiles, plaster or paint. The cost of construction registered a rise of around 8% in May 2023 and more than 100% year-on-year: that of materials, 7% monthly; general expenses, 10%; and labor, 8%Korn adds.
Carísimo points out that the industry depends, to a large extent, on imported inputs and the value of the dollar, “although sometimes materials maintain their price despite currency fluctuations.” “Currently, there are no supply problems and investing in materials continues to be a safe way to safeguard assets,” he says. This strategy counts for both large and small investors. Because, in the case of developer companies, “they need to beat price increases, for example, through the collection of materials, thus additionally guaranteeing delivery times. Other actions that companies take to lessen the impact of excessive increases are financial investments, such as the purchase of the MEP dollar and Mutual Investment Funds,” says Korn.
In the case of Bercomat, it has the “House Loan” through which it grants up to $200,000 credit for the purchase of construction materials with the option to pay in up to 36 fixed installments. “The middle class suffers the impact of the economy due to the increase in prices of basic inputs. However, people continue to take advantage of financing plans to invest and protect their assets in the long term”, adds Carísimo. Within chronic uncertainty, this business can paradoxically show the advantages of being able to offer itself as a haven for investment by ordinary customers. With that, for now, it is enough to keep the sector afloat.
by Marcelo Alfano
