Builders from Queretaro foresee a complex scenario

Queretaro, Qro. The construction industry maintains discouraging expectations for this 2023, because the increase in the cost of materials will persist, coupled with the fact that it is still far from pre-pandemic activity.

For the state president of the Mexican Chamber of the Construction Industry (CMIC), Óscar Hale Palacio, these expectations are fueled by the 2022 complex that the industry suffered, despite predicting a positive year.

The closing of 2022, he exposed, improved compared to previous months; However, we still need to know the final balance of the last quarter to know in detail the productivity in the sector.

“It was a difficult year, we know that 2023 will also be difficult, we are not pessimistic, but we are realistic (…) I think it will continue to be just as difficult, what happened at the beginning of the year? We started with very good expectations , but what made us stop was the rise in prices,” he said.

The increase, even at double digits, in the price of building materials had an impact on the halting of construction projects, particularly private works. The impact for the industry was felt to a greater extent, since the value produced in the state is mainly made up of the private sector.

“This increase made many people stop, especially in the private investment part, because private investment is around 80%; Yes, there was a lot of awareness on the part of the investors to be expected because now money and materials are very expensive. Money is expensive due to interest rate hikes, so I have no doubt that 2023 will be different,” Hale Palacio noted.

For this reason, investments in the construction sector are cautious. And the call to the builders, he added, is to be prudent and take into account the increases in costs, as well as the rise in interest rates in case of contracting credits.

At the international level, there are various factors that affect the decision-making of the industry, including the complex moment the US economy is going through, as well as the effects of the war between Russia and Ukraine.

“We are being very cautious in investments and in possible loan requests to face any contract that comes our way, due to the movement in rates, so inflation will continue (…) In certain aspects we still see a complicated year, we are being very cautious and measured in our visions and possible contracts to close”, said the state president of CMIC.

Still below pre-pandemic value

At the end of last August, the production value of the construction sector in the entity is still 0.9% below the result of 2019, prior to the Covid-19 pandemic that paralyzed the economic sectors, according to data from the National Institute of Statistics and Geography (Inegi).

At an annual rate, the value of construction in Querétaro increased 6.3% in the eighth month of 2022, the lowest level in the last three months.

This slowdown trend shows that the rebound effect is ending, since between June 2021 and February 2022 there were falls, which on average represented a drop of 11.6 percent.

estados@eleconomista.mx