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an industry that cannot be stopped

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an industry that cannot be stopped

By: Carlos Tobar

At a critical moment in the national economy, when most indicators point to a slowdown in the productive sectors that generate wealth and employment, the construction industry requires special attention.

Not only because of the number of jobs it generates annually: 1,600,000 direct jobs and close to 2,400,000 indirect ones, but also because there are thousands of construction companies consolidated in tens of years, with all that that means. In addition, this industry is the final phase of absorption of thousands of products: brick, cement, steel, iron, floors, veneers, wood, and a long etcetera, which make up a vital production base for the economy.

As if that were not enough, it supports one of the most important bank credit businesses, if not the most important. It moves the builder’s credit, resources without which housing projects in all their modalities or, commercial, could not be done, as well as guarantees with the long-term mortgage credit that buyers access their real estate properties.

Colombia’s experience in consolidating this industry is very important. We spend decades learning the secrets of how it works. How to connect savings and its institutions with the urbanization of our cities to guarantee family ownership of homes.

Understand that the business works for the modern sector of the economy (unfortunately 35 or 40% of society), since to access it the family income must reach a minimum of between 3 and 4 minimum wages, to pay the initial fee and then be able to absorb monthly installments for 20 or 30 years. They are basic experiences that are proven in thousands of successful and failed experiences.

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But, and there is always a big but in every business in a country like ours, due to the low saving capacity of 85% of formal workers, the government (and all governments have done so in recent years) must complete with subsidies to achieve the financial closure of the home purchase.

The most successful of the programs has been “Mi casa ya”. With which, in the middle of the pandemic, not only did the industry not decrease, but the construction dynamics were exceptional, becoming a countercyclical mechanism in that period of economic paralysis.

The sector has been slowing down since the end of last year, due to the government’s failure to comply with the promised subsidies, and in the first months of this year the situation has worsened. It is concerning that in the investment budget of the national government, an amount of $2.2 trillion is projected this year, which would cover the shortfall at the end of 2022 and the investments planned for this year. The directors of the construction union and the economic analysts estimate that in order not to lose the extraordinary dynamic that it brings, the investment of the national government should be around $3.3 trillion pesos.

In moments of economic difficulties of the national productive apparatus, we hope that this industry, as I already said, consolidated and an international example, receives the necessary boost.

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