BOGOTA (Reuters) – Colombia’s construction industry is poised to help lead an economic recovery this year, backed by subsidy programs and new road infrastructure, but it will have to switch from selling projects to building them, the biggest constructors’ association said on Thursday.
Last year the industry was the most heavily affected by the economic impact of the coronavirus pandemic. It contracted 27.7%, four times more than Colombia’s economy as a whole.
While intentions to buy homes strengthened in the second half of last year – partially driven by a government subsidy aimed at low to mid-earning households – construction activity has yet to regain momentum.
“We must move from selling to building, because that’s where we’re going to achieve our higher objective of reactivating the economy,” Sandra Forero, president of the Colombian Chamber of Construction (Camacol), told a virtual conference.
Construction of housing and other buildings, but not infrastructure projects, is set to grow 8.4% this year, Forero predicted, compared with a decline of 27.2% in 2020.
Including infrastructure projects, construction could grow by 6.6% to 10%, according to analysts who attended the conference.
“There’s light at the end of the tunnel… We think sectors, like construction, which took big hits in 2020 are going to lead the recovery,” said Jose Ignacio Lopez, director of economic investigations at Corficolombiana.
“Generally speaking we’re optimistic about the potential for the buildings sector… while in infrastructure, concerning roads, we’re seeing various government projects …soon to receive important investments.”
The government is progressing with plans for a fifth round of infrastructure concessions, which includes road, rail, river, and airport projects and could generate 18.5 billion pesos ($5.17 billion) of initial investment.
Latin America’s fourth-largest economy is set to grow 5% this year, per government forecasts, versus a contraction of 6.8% in 2020.
($1 = 3,578.29 Colombian pesos)
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; editing by John Stonestreet)
