The Peruvian Chamber of Construction (Capeco) reported that according to Inei, the GDP of the construction sector decreased 8.8% between January and July, the worst result in a decade. For August, it is estimated that the drop will continue and reach 7.9%. This is mainly due to the continuous decline in cement consumption for more than a year, which fell 6.1% for July and is expected to fall 10.1% for August (See graph).
On the other hand, the progress of public works fell for the third time in the last six months, and for July it had a decline of 18.6%, and could drop to 2.2% in the eighth month of the year.
Construction would have decreased 7.9% in August and 8.8% since January. Photo: Capeco
“It is difficult to predict what is going to happen because the stoppage of works continues to increase. Construction is the second most affected sector between January and July, it is only surpassed by the fishing sector, which for seasonal reasons has a very strong drop,” said Guido Valdivia, executive director of Capeco, during the presentation of the Construction Economic Report No. 69.
How would the Construction sector close in 2023?
By the end of the year, the union estimates that the sector will end in red, with a contraction of 3.3%. Along these lines, other entities such as the Central Reserve Bank (BCRP) reduced its performance forecast to 3.7% for September, according to its June inflation report. For its part, the Ministry of Economy and Finance (MEF), in its recent report on the Multiannual Macroeconomic Framework 2023-2026, projected a slight increase of 0.5% and a contraction of 3.4%.
Four private consulting firms also agree that construction GDP will decrease, with a range of projections that goes from -1.7% to 6.7%, with an average of 3.9%. “What could happen is a worsening of this figure, a worsening due to the climatic situation,” added Valdivia.
Although an improvement in the situation of the sector is expected by 2024, with growth projections of 3.2% according to the BCRP and 3% according to the MEF, this is subject to external factors.
“Next year’s recovery will depend on when the El Niño phenomenon begins, when it starts to rain, and if it is in November. The last two months of the year, construction will probably not grow, with December being a key month, because it represents around 25% of the sector’s product,” warned a Capeco specialist.
Source: Larepublica
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