Between January and May this year $97 million was awarded in loans for housingconstruction, 17% more than in the same period in 2015.
The monthly report from the Salvadoran Chamber of Construction (Casalco) indicates that loans granted for home purchases rose by less than 1% in the period in question, going from $133.9 million to $134 million.
Three banks account for 70% of total loans granted to the construction sector, whose balance up to March grew by 17% year on year.
The annual increase of 17% is lower than the 25% growth achieved in the loan portfolio for construction between March 2014 and March 2015, reflecting a slowdown in the growth rate of financing commercial construction, housing and infrastructure.
A trade show for the construction industry will be held from From June 1 to 4 in Tegucigalpa, featuring conferences and products exhibitions by companies in the sector.
The event Expoconstruye 2016 will be held at the Plaza Juan Carlos, in the Honduran capital, and will include the participation of construction and real estate companies, banks and other bodies linked to the sector.
Up to December 2015 28% of the total banking portfolio was destined for consumption activities, 26% to the construction sector and 16% to service activities.
Financial Monitoring figures compiled by the Commercial Intelligence unit at CentralAmericaData com show that credit unions are the institutions who awarded the most loans of this type, with 29.8% of their total portfolio.
While in the US the number of man hours needed to build a house is 9.4 hours per square meter, in Costa Rica it takes between 40 and 60.
Low labor productivity, on top of the cost of building materials, social charges and high costs of other materials such as energy, are preventing firms from being more competitive in an industry where both end house prices for completed works and gray works, exceed those in neighboring countries.
The construction guild is proposing that in tenders for construction of public works a clause on price adjustments always be included, to reflect changes in prices of raw materials.
The Nicaraguan Chamber of Construction (CNC) argues that with the drop in fuel prices, some public works projects are being tendered with prices which were established in relation to this situation, but fear that within one or two years these costs may rise once again and that would impact the construction.
The Multilateral Guarantee Investment Agency has awarded the Colombian company Corona a guarantee of $11 million to build a plant to manufacture ceramics for bathrooms in the country.
From a statement issued by the Multilateral Investment Guarantee Agency (MIGA):
The Multilateral Investment Guarantee Agency (MIGA), and entity of the World Bank Group which offers political risk insurance and credit enhancement mechanisms, today announced its support for the acquisition, expansion and modernization of a plant for bathroom ceramics in Managua (Nicaragua) belonging to Corona, a ceramics manufacturing company based in Colombia. The investment will increase the availability of sinks and toilets in the country, which is facing major sanitation deficiencies, above all in poor rural areas.
Construction companies are negotiating with the banking system for access to preferential interest rates in order to finance housing projects for lower-income sectors.
In order to alleviate the poor performance that construction sector has seen in recent months, construction companies plan to focusing on developing high rise housing projects, which, in the view of the entrepreneur Ernesto Lazarus, "... is a solution for those who have difficulty buying a house because of the price of land."
The scare liquidity of colones explains the lower growth of loans in this currency, while credit growth in dollars continues to lose strength.
Added to the diminished liquidity in colones putting downward pressure on credit growth in that currency, is uncertainty at enterprise-level over recent changes in the exchange rate and lower credit demand for real estate projects, power generation and tourism, as explained by bankers to Nacion.com.
Lack of private sector confidence in the government and excessive bureaucracy prevented greater investments being made in this industry during 2013.
The construction industry describes 2013 as a year of stagnation, it is estimated that the Gross Domestic Product (GDP) of the sector will be 0% even though the previous year it closed at -2.4%. "We are closing the year without any growth," said Carlos Guerrero, president of the Salvadoran Chamber of the Construction Industry (Casalco).
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Comercialization of Urbanization
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