Argentina Construction Overcame the Farmer Stoppage and Rose 7.5%

In June 2008, Argentina experienced a sharp fall in construction due to the problems between the Argentine government and the farmers.  According to the article “Construction Overcame the Farmer Stoppage and Rose 7.5%,” which appeared in La Nacion in August, construction picked up again in July, rising 7.5 percent in comparison to the previous July.  It also rose 10.6 percent from June, the largest rise between months since early 2002.  The amount of surface area registered for construction in the 42 municipalities on which the Indec reports also rose in July.  It went up 38.2 percent compared to June and rose 25.3 percent compared to July 2007.  There was also a strong upturn in the sales of some raw materials and supplies.  Sales of iron for reinforcing concrete went up 28.1 percent compared to last year, hollow brick sales rose 24.7 percent, cement rose 6.9 percent.  Since the beginning of July, the materials sector has expanded by 9 percent compared to last year.  All of these numbers indicate that the construction industry is not only recovering but doing well.  Though the growth is not as high as it has been, it is still more than acceptable.

A study done by the consultancy reported on the year-by-year growth of oil company constructions and business offices.  The business grew by 19.8 percent and 13.5 percent respectively between 2007 and 2008.  They also found that the businessmen involved in these types of construction were less pessimistic than they had been about the fate of the market.  A lower percentage of business people believed that the market would drop and most believed that the market would at least remain stable.

Road work increased 4.3 percent compared to 2007 while other infrastructure projects grew 10.1 percent.  However, due to many poorly carried out road projects, the sales of asphalt fell 19.3 percent in July 2008 compared to July 2007.  Many regions blame the failure of these public works projects and roads on the national government using the money for other fiscal needs.  A report argued that the “loss of dynamism” in the sector was due to fiscal adjustments made by the national government which negatively affected the financing of public works in the provinces.  This sector was once one of the most important in the country and was one of the fastest growing.  When it began to decelerate at the beginning of 2008, some jobs were lost and people across the country felt the impact.

Following in the tradition of her husband, President Cristina Kirchner announced in late August of 2008 that the government was inaugurating work on a third high-tension electrical line.  The line will bring electricity to Yacyretá and, according to Kirchner, it will create jobs and opportunities for many working class Argentines.  This announcement was coupled with optimism on the part of the President that the growth figures in the construction industry were a good sign for the future.

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