Construction activity increased for the first time since December 2008, according to the Monthly Construction Activity Index (Imacon) released by the Chilean Chamber of Construction this week. The Index shows an increase of 1.4% from March 2009 to March 2010, reflecting a rise in employment and demand.
The March growth in Chile's construction industry comes following the February 27th 8.8 magnitude earthquake and a global recovery of demand following the international economic crisis.
Positive economic indicators of the industry include a 0.9% growth in employment and a 2.3% increase in sales by industry suppliers. For comparison, there has been a 16% decrease overall in activity by contracted workers for March this year.
The earthquake has certainly created demand for the construction industry. At the end of March it was estimated that the earthquake damaged almost 400,000 homes and totally destroyed more than 80,000.
Still, Chilean Chamber of Construction (Cámara Chilena de la Construcción or CChC) president Lorenzo Constans notes that the effects of the economic recovery policies have not yet been fully evaluated. He adds “what has been evaluated is that the growth we project for the year is the same that we had projected before the earthquake, which is to say, the effect is neutral.” The organization maintains its projections of a 7% growth in industry activity for 2010.
Currently, Chile's major construction projects focus on the removal of rubble, the construction of emergency housing and the repairs to public infrastructure. Constans notes, too, that that there could be a decrease of roughly 3% in real estate sales for 2010. Some significant indicators from the CChC for March include a decrease of 10.8% in new building licenses.
Still, Vincente Domínguez, executive director of the Association of Real Estate Development, says, “the recovery might speed up as the expected reconstruction gets approves and the real estate market will tend to normalize.”
Benjamin Schneider – Santiago Times