Copymecon ensures there is no mobility in construction

He construction sector has been a great bailout for the world economy, even in times of war, so great challenges loom for the country with a drop in the sector in 2022 and very little or no mobility so far this year, said yesterday the president of the Dominican Confederation of Micro, Small and Medium-sized Construction Companies (Copymecon), Eliseo Cristopher .

He affirmed that he agrees with former president Leonel Fernández regarding the drop in construction in the country.

Christopher said that the global economic slowdown is partly due to measures to combat inflation, as part of the monetary policies of central banks, which bank interest rates have risenwhich has also impacted domestic loans and the construction sector.

This is dangerous for the construction sector, because increases interest to builders and also to buyers, which in turn reduces the purchase of homes, he said. He recalls that neither wages nor the purchasing power of the population is reflected in the extent to which inflation and bank interest have risen.

“The construction sector has very strong situations due to the inflation rate and for that reason we have been alerting since 2022, and we said that with the interest rate and the inflation in the prices of construction materials we were going to have a paralysis in the construction sector“, said. He recalled that in January 2022 the second sector that grew the most completely collapsed and barely grew 1.1%.

In an article entitled “Uncertainty about the world economy”, published this Monday in Listín Diario, former president Leonel Fernández indicates that the measures to control inflation have impacted dynamic sectors such as construction by -11.5%,trade, -0.7% and mines and quarries, with -2.8%.

All of that is to say that, since the beginning of this year, construction has been literally paralyzed.

In general terms, there are no new constructions of apartments, or offices, or commercial establishments, indicates. “After the Central Bank announced a spectacular growth of 4.7% in April 2021, now it turns out that in January and February of this year, the accumulated growth has been only 1.1%, it would be logical to conclude, then, that there has been a collapse in the Dominican economy”, he affirms.

It also says that these growth data during the first two months of this year are well below what was achieved in January and February 2022, which was 6.0%, which indicates a decrease of 4.9 percentage points.

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Notes that As a result of high interest rates, an alarming situation has arisen for those who need access to credit to start new projects, those who have been prevented from carrying out their initiatives and, in the same way, for home buyers.

Piantini thinks
For the economist Luis Manuel Piantini, this will not be a short-term slowdownbecause as former President Fernández pointed out in his writing, the factors that gave rise to the rapid growth of the first decade of this century are no longer there.

They have left, he said, “and others that restrict growth have been added, such as the war in Ukraine and the weakening of the banking system and by the accelerated technological developments such as the cases of Artificial Intelligence and Robotics and their impact on the productive and economic growth will be seen in a longer term”.

The interest rates in North American and European banks are pushing the accumulation of greater unpayable loans and the fall in the market price of fixed-income assets, affecting profitability and their bank capital, which is becoming a setback for the granting of credit in the country, he explained.

Piantini asks the State to pay attention to the structural issues of the economy. He says that in the construction sector the largest mass of workers is made up of the Haitian population. “In other words, these are the ones most affected by the fall experienced in this sector.” He adds.

Inflation in this country does not respond so quickly in its decline to the restrictive policies applied by the monetary authorities or to the falls in prices experienced by raw materials or international freight or to the appreciation of the Dominican peso, in Piantini’s opinion.

The economist affirms that economic problems are more structural than seeing them through simple conjunctural policies.

Affected He says that in construction the largest mass of workers is Haitian. In other words, these are the most affected by the fall experienced in that sector.

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