The sector that sustained the Salvadoran economy in the last two years suffered a sharp contraction in the second quarter of 2024.
Theconstruction industry suffered a sharp contraction of 14.5 %In the second quarter of 2024, the first time since the end of 2021, the Central Reserve Bank (BCR) confirmed.
This sector maintained the Salvadoran economy in the last two years, with double-digit growth rates, from 0.58 % to 24.7 %.
However, in the first quarter of 2024 it experienced a slowdown to 1.24 per cent, while for the second quarter it did not hold the contraction at a rate similar to that experienced in 2020.
The construction industry is considered a “tractor of the economy because it stimulates other sectors, such as the demand for cement or iron manufacture. Its dynamism depends on both the private and public sectors, especially on investment for public infrastructure projects.
The alarms of a contraction were raised last April, when the Economic Activity Volume Index (VAT), a short-term photograph of business dynamics, contracted in 17.35 per cent. May followed with a fall of 4.81 % and June with 16.1 %.
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The slower dynamism of the sector was evident in the growth of gross domestic product (GDP) in the second quarter, witha rate of 1.4 %The lowest since 2020 when there were contractions for the covid-19 pandemic.
Resistance
However, José Velásquez, president of the Salvadoran Chamber of Construction (Casalco), ruled out in early September that the sector faces a contraction because private projects are still underway. “Far from slowing down or slowing down, we see it growing,” he assured the press.
Velásquez acknowledged that investment in public works has decreased in relation to the extraordinary events of 2023, when sports spaces were built for the Central American and Caribbean Games and the scenarios for Miss Universe.
“If you ask us and as we see the activity of our affiliates, I could tell you that the behavior is quite similar to last year, with the exception of these very specific events,” the executive said at the time.
By 2024, one of the largest projects is the expansion and construction of the Los Chorros viaduct, which, according to the Ministry of Finance, has an annual investment of $171.87 million, of which $738,858 has been implemented last July.
The start order was given last year and that, due to some circumstances, has not progressed or walked in the way we all would like, but it is already happening. That’s a very big project, that by the time the work starts, we’re going to start seeing an injection of money, Casalco’s president said.
The construction and equipment project of the Pacific International Airport also generates enthusiasm among the builders. The Autonomous Port Executive Commission (CEPA) launched in July the first tender for the construction of the terminal in Conchagua, La Unión.
The Treasury’s public investment report notes that for the air terminal there is a budget of $19.49 million in 2024, of which $2.4 million has been executed as of July.