translated from Spanish: Construction: economic engine the collapse

in the construction industry, one of the pillars of economic activity by its effect of spillover to the rest of the sectors, recorded during the last year a rise of just 0.8 per cent from 2017 . What is worrying is the annual collapse of 20.5% in December compared with the same month in 2017. According to the figures of the indicators of economic activity of the construction (ISAC), the sector experienced a decline of 3.3% in just one month.
Activity falls for fourth straight month, after leaving a streak of 17 months of continuous growth, between 2017 March and August last year. This is due to the change in the strategy of change, that happened to use the sector as workhorse to enable the economy to a fiscal adjustment scheme, where public works also suffered the adjustment. 
“This sector is one of the hardest hit in 2019, unlike what happened in the past election years, when it is configured as an engine of the economy,” said the consulting firm Ecolatina. 

The sector was strongly conditioned by the devaluation process, the fall in consumption and the Government decision to shrink budget to meet the fiscal guidelines agreed upon with the IMF. Thus, the contraction began last September with a decline of 3.8%, to expand 6.4% in October and collapsing to 15.9 per cent in November and 20.5% in December. The land authorized by building permits granted for execution of works private in the 60 most important municipalities of the country recorded in December a low of 13.3% y/y-shaped and all last year shrank by 7.9%, with respect to 2017.
“The negative effects of the new economic context on the activity will be felt in almost all of the 2019”, warned the Ecolatina report.

According to the industrial qualitative survey, half of the companies that carry out private works provides the sector’s activity level will decrease during in the first quarter of the year, while 44% estimated that it will not change, and only 6% projected a rise.
Among the companies dedicated to public works, 59.1% said that the level of activity will decrease during the period January – March, another 36.4% believe that it will not change and a 4.5%, which will increase. That estimated a decline in the level of activity over the next three months attributed it mainly to high interest rates and the difficulties to access lines of credit and called for lowering the tax burden and labor costs. 
“Portend a year in red for the construction investment paralyzed private and the decline in public works in the context of the evolution of fiscal balance,” estimated the consultant for the 2019.En this note:

Original source in Spanish