The cost of construction materials has reached its highest point since 2008, despite the current economic crisis. However, the construction sector has shown some positive aspects over time.
In particular, property deeds have experienced an increase of 31.2% in the Autonomous City of Buenos Aires (CABA) and 14.2% in the province of Buenos Aires until November. This growth has been driven by the appreciation of the exchange rate and the recovery of mortgage credit.
The demand for cement, a key indicator of construction activity, has decreased by 25.3% year-on-year, reaching minimum levels comparable to those of 2005. Two main factors have contributed to this situation: the drastic reduction in public works spending by 76.5% in real terms during the year 2024 and the increase in the Construction Cost Index by 91.2%, far exceeding the depreciation of the CCL dollar (17.7%).
Despite this, in the province of Neuquén, employment in the construction sector has remained stable, driven by demand generated by the expansion of the hydrocarbon industry. At the national level, there has been a loss of 69,700 formal jobs and the closure of 1,582 companies between November 2023 and October 2024, reflecting an overall negative outlook for the sector.
During the first year of management of Javier Milei (December 2023 to November 2024), construction activity has experienced a cumulative decline of 28.5%. A report from the consulting firm Analytica noted that this crisis has only been comparable to that experienced after the exit from convertibility, with an accelerated and sustained decline.
Although in election years there is usually an expansion in construction activity, the signs from the current government point more towards a continuous adjustment, which does not project a promising future for the construction sector in 2025.
