Some of the causes mentioned are the low implementation of works by the State and municipalities, reluctance to invest remittances and fiscal reforms that discourage investment.
An article in Prensalibre.com reports that Oscar Sequeira, president of the Statistical Commission of the Guatemalan Chamber of Construction (CGC), said "The new administration generated positive expectations which led to dynamism in the sector, but as time passed by it has gone down, especially after the tax reform."
The Chamber of Construction Companies is urging the Government to create a new financing model for home purchases.
Employers propose that the government subsidize up to four interest rate percentage points for the purchase of homes under $38,000 and up to two points for homes between $38,000 and $51,000. Current interest rates fluctuate between 7.5% and 9%.
The lack of state resources to pay contractors means public works remain paralyzed.
In addition to this the private sector continues to struggle with less houses being built in recent months.
"The Monthly Index of Construction Activity (Imacon) for May reveals that the sector recorded a drop from 81.4 to 64.2, its lowest level since March 2002, according to the Guatemalan Chamber of Construction (CGC)," reports Elperiodico.com.gt.
In August, the sector reported the softest year over year drop so far 2009: 9.4% when compared to August 2008.
The Monthly ConstructionEconomic Activity Index (Imacon), prepared by the Construction Chamber (CGC), shows that the sector's decline is slowing down, after dropping 26.1% in May.
In the first quarter, the municipality of the capital city approved the construction of 243,010 square meters, 69.15% less than during the same period in 2008.
According to a report by the Congressional Committee on the Economy, there were 787,777 meters approved during the first four months of 2008.
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