NewsTHE CRISIS IN THE CONSTRUCTION SECTOR

THE CRISIS IN THE CONSTRUCTION SECTOR

The construction sector has managed to recover during 2021 many of the levels prior to the Covid-19 crisis. In the first half of 2021, the total public tender in Spain stood at 10,555 million ??, so it is foreseeable that by the end of the year it will reach 18,188 million ?? of 2019.

However, these amounts are completely insufficient if we compare them with the more than 40,300 million of total public bidding in 2007 (Data: SEOPAN).

If we analyze the data on new construction visas in Spain, something similar happens: it is very likely that by the end of 2021 similar values ​​will be recovered to those we already had at the end of 2019, just before the pandemic. We will also be facing data well below those that were handled before the crisis of 2008.

The cement consumption indicators also offer us quite positive data. At the national level, according to Oficemen data, a growth in cement consumption of approximately 9.5% is expected. At the regional level, this increase could be around 13.5%.

These data, at first glance so positive for the construction sector, must be taken into account with great caution. The total debt of our country already exceeds 122% and the deficit will be around 8.6% at the end of the year. On the other hand, Spain continues to lead the EU in terms of unemployment, with an unemployment rate of 14.6%.

This circumstance, together with a galloping inflation of 5.4%, is not at all positive, also taking into account that the levels of GDP recovery are far below what is desired. In 2020, GDP fell by 10.45% and, in this year, despite some forecasting a 6.5% rebound, the most conservative (the EU) place it at around 4.5% . In this 4.5%, the positive effect that the Next Generation funds could have is already included, despite all the uncertainty surrounding these funds.

There are other threats, such as the price of electricity, gas, CO2 emission rights and many raw materials, which further cloud this very positive perception, making the industry in general less competitive.

In this context, it is essential to send the markets signals of stability, legal security and support for private initiative, so that it is capable of generating employment, which is the best and only medicine to improve the situation.

It is essential that the different administrations (local, regional and central) organize their accounts by approving austere budgets, based on realistic income and aimed at reducing superfluous and unproductive spending. In times of crisis, it is necessary to invest and spend on social policies and actions that result in better services for the administrations and that serve to boost the business fabric and create jobs.

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