MercoPress. South Atlantic News Agency

Construction slump in Punta Arenas lifts unemployment to 6%

The end of major construction contracts and no new projects has stalled the industry

Unemployment in the extreme south of Chile, Magallanes Region, increased for the second mobile quarter running and now stands at 6% with construction industry receiving the heaviest blow, according to the latest release from the regional Statistics Office, INE.

In the March-May quarter unemployment increased 0.6 percentage points compared to the previous quarter (Feb./April)

“The number of unemployed jumped 12.7% of which 4.060 are seasonal jobless, which is 17.2% higher that the previous quarter”, said Jose Parada head of the Punta Arenas INE office.

Regarding gender, unemployment was more severe among women than men with an average 6.1% and 5.9%. The loss of jobs among women (almost 2.000) is attributed to “a lower manufacturing activity”

However the major blow to jobs came from the construction industry as emblematic contracts concluded and new ones are delayed because of the re-allocation of budget funds, as a direct consequence of the February earthquake that hit Chile.

During the first five months of 2010, construction lost 32.1% jobs. At the beginning of the year in the first quarter construction employed 8.100 people mostly in the building of the regional hospital infrastructure.

At the end of May with most of the public work finalized and only the ‘finishing touches’ left, the number of jobs had plummeted to 2.600.

“This is because there is no longer any contract that can create 8.000 jobs in the construction industry. We are facing a negative scenario with no immediate prospects of change”, pointed out Parada.

Actually there were two emblematic projects; the hospital and the Casino, which helped boost construction and even attracted labourers from neighbouring regions which have mostly stayed and joined the unemployed.

With the bidding process for other major public works delayed and with no new resources until the second half of 2010 and next year, ‘prospects are not encouraging’.
Furthermore contractors are beginning to take back their machinery to other regions of Chile and these companies forecast a further loss of up to 2.000 jobs in the coming months.

Punta Arenas Construction Chamber held an urgent meeting and has called on the Chilean regional and national governments for a regional development strategy.
A meeting with Magallanes Mayor Liliana Kusanovic was requested over two months ago and is still pending.

According to INE, unemployment in Chile at national level increased 0.2 percentage points in the mobile quarter March/May reaching 8.8%. However in the last twelve months statistics show that another 450.000 people are employed and job creation remains steady as the Chilean economy recovers strongly from last year’s recession.
In the first quarter the Chilean economy expanded 4.9% and 6.9% in March/May.