The group proposes that housing and public works be reactivated in order to face the crisis and revive the economy.
Yesterday, the Salvadoran Construction Chamber (Casalco) proposed a preliminary plan (Law of Preferential Interest Rates), which would require $375 million for housing which would be financed by commercial and state banks.
To accomplish this, they proposed that 60% of the amount, that is $225 million, be financed by commercial banks and $150 million by state banks.
The amount of sector loans decreased 22.5% in eight months, the number of loans dropped by half and $60million in bidding rounds were never implemented.
The situation is critical, especially since this drop may be even greater because final quarter results for the year are not included, explained the Executive Director of Casalco, Ismael Nolasco.
Sector employment fell 1.2 per cent during the third quarter of 2008, he confirmed.
The main cause of this increase is the rise in start up costs presented in the contracts, due to the increase in the price of raw materials.
The rise in the price of construction materials forces modifications to budgeted amounts. Some 7,500 jobs have been lost, according to CASALCO. Up to September the construction industry reported 23% in abandoned public tenders, a 9% increase from 2007.
The decline in credit is affecting both the execution of projects and home sales, resulting in a stagnation for this sector.
The optimism that the construction sector could achieve acceptable growth, present until last March, has vanished. The US economic crisis and its related effects have already begun to impact this sector of the economy.
According to the Salvadoran Chamber of Construction Industries (CASALCO), the outlook for this year will be further complicated by political instability and an increasingly difficult access to credit. "We are seeing the first negative signs in the economy, and the sector sees a troubled future. We don't know how much it will affect us, because the phenomenom in the United States is not measurable yet" said Ismael Nolasco, executive director of CASALCO.
The construction industry in El Salvador is feeling the impact of the current economic crisis.
Housing projects have declined in number according to Ismael Nolasco, executive director of the guild in this sector.
The executive of the Salvadorean Chamber of the Construction Industry says that if obstacles are look at sector by sector, "There are problems for the small and medium-sized companies for developing housing projects."