Latin America Biannual Construction Market Report 1Q/2Q 2024
Labour and materials
In April, the Construction Materials Price Index of Metropolitan Lima decreased by 0.21% due to a fall in prices of six groups out of ten that comprise the indicator. Majolica and mosaics (floor and wall coverings), bricks, metal (construction rods, LAC steel plates, LAC steel pipes and nails), glass, plastic pipes and fittings and wood (chipboard, screw and plywood) all fell.
However, other materials increased in price, such as electrical supplies (power cables), aggregates (stone, concrete and sand) and concrete structures (corrugated fibre sheets).
Meanwhile, data from Revelio Labs shows that active job postings in the construction industry continue to fluctuate around the 100,000 mark this year. With 98,000 vacancies at the start of April, this figure is down 77% on last year’s 424,000.
Labour supply and rates
At 60%, a slight majority of respondents experienced issues with labour supply in the last six months.
This result echoes sentiments expressed by the World Bank in April when downgrading its 2024 economic growth forecast for Latin America and the Caribbean from 2.3% to 1.6%. Citing education as a key barrier, 29% of companies in the region say they cannot expand due to a lack of skilled labour. William Maloney, the bank's chief economist for the area, links the issue directly to poor public school and training systems, which are not geared towards the needs of the private sector.
According to BBVA Research, business confidence in Peru has reached its highest levels in the last three years — reflected in over two-thirds of respondents noticing labour rate increases during the previous six months.
Most respondents, 85%, see the impact of social-economic migrants as positive. Certainly, productivity and income gains can arise when the migrant population is better educated or skilled than the local population, which helps plug the skilled labour gap. A previous World Bank study estimates that Venezuelan migration would boost aggregate economic growth, with labour productivity growing by 3.2%.
