Scotiabank projected that the construction sector would recover only in the second quarter of 2024, after the 9.6% drop in August of this year that contracted the sector 9% in the first eight months.
According to the bank, the results were below initial expectations, especially due to the low consumption in that period of cement intended for self-construction, which represents 70% of its consumption. This, without taking into account a low level of public execution in local and regional governments.
Thus, according to Scotiabank, the construction sector in Peru would suffer a contraction of 6.4% at the end of 2023. However, it could take a breather in the last part of 2024 due, for example, to the development of prevention works against the arrival of El Niño.
A reduction in the rate of decline of the sector is also estimated thanks to a higher level of investment in concessioned infrastructure projects, in addition to greater dynamism in the real estate sector associated with a drop in the prices of materials and interest rates on mortgage loans.
“This taking into account that in the first quarter the possible heavy rains on the north coast would affect the normal execution of the projects, as well as the transportation of cement due to the potential temporary interruption of the roads,” the report states.
There is also the problem of self-construction. Scotiabank said that it has not been possible to recover cement consumption for this activity, which was reduced due to social protests and Cyclone Yaku during the first four months of the year.
Thus, from January to September of this year, cement shipments fell 12%, according to figures from the Association of Cement Producers.
Added to this is the lack of dynamism in the demand for cement for the development of private projects, “following the trend of private investment, which would fall 6.5% this year, a drop in mining investment and, to a lesser extent, non-mining investment”.
“Although we expect cement consumption to decrease at a slower rate in 4Q23, partly due to prevention efforts in the face of the probable occurrence of FEN, the result at the end of 2023 will still show a significant drop,” he continues.
Source: Larepublica
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