Following the release of data from the National Institute of Statistics and Census (INDEC) showing a year-on-year drop of 52.1% in construction output in Q2 2020, Dariana Tani, Economist at GlobalData, a leading data and analytics company, offers her view on the situation.
“The significant decline in construction output in the second quarter of the year reflects the deepening economic consequences of the pandemic and the containment measures imposed by the Argentine Government to limit the spread of the virus. The data is also consistent with GlobalData’s projections of a sharp contraction in the sector in 2020 and slow recovery in the next four years.”
“In GlobalData’s recent quarterly construction update, the forecast for Argentina’s construction industry was revised downwards with output now expected to contract by 23.5% in 2020 and -5.4% in 2021, down from the previous projections of -16% and -5% respectively.”
“The construction industry in Argentina was already struggling before the emergence of the COVID-19 pandemic amid deteriorating economic conditions – a weakening peso, rising inflation, high interest rates and a debt crisis. However, the COVID-19 outbreak and related lockdown restrictions have further exacerbated these issues.”
“While activity is expected to gradually recover in the coming months as the government continues to push forward its reopening plan to kickstart the economy, the level of output will not be sufficient to pull the construction sector out of recession next year. Risks of a second wave of COVID-19 infections, as well as difficulties to access finance for projects, will continue to hinder investment in critical sectors such infrastructure, residential and energy and utilities.”
Read the article online at: https://www.worldcement.com/europe-cis/24092020/globaldata-argentinas-construction-industry-to-contract-by-235-in-2020/