Peruvian builders envision an optimistic 2024 despite challenges

Peruvian builders are envisioning an optimistic outlook for their sector, as indicated by the Peruvian Chamber of Construction (Capeco). Following a disastrous 2023 that left the sector in the red with a 7.9% decrease in GDP, 2024 seems to bring better expectations. In the first months of this year, construction has seen a 5.65% increase, and it is expected that this positive trend will continue in May, with a projected increase of 4.1%. Guido Valdivia, executive director of Capeco, has highlighted that despite the decrease in cement consumption, the execution of state projects has shown sustained growth in recent months. In this sense, Valdivia emphasizes that the public sector has executed close to 25% of its investment budget until May, which constitutes a record in the country's history in terms of infrastructure investment. The Business Expectations Survey conducted by Capeco with companies in the sector reveals that entrepreneurs maintain optimism regarding the growth of their operations. A 4% growth is expected by the end of this year, with entrepreneurs linked to public works being the most optimistic, projecting a 6% growth in this segment. Despite the positive expectations in the construction sector, there are risks threatening this encouraging outlook. Entrepreneurs in the sector have identified the government's execution capacity at the three levels of government as the main risks. Inefficient management at the national and subnational levels is seen as a threat that could negatively impact economic reactivation and project development in the construction sector. Distrust in authorities is reflected in the reduction of investment expectations in new projects by sector entrepreneurs, according to Capeco's survey results. This decrease in confidence is exacerbated by the perception of inefficiency in government management, leading to a more conservative stance in planning new investments. Despite the challenges facing the construction sector, the recent publication of the new Public Procurement Law has been received with optimism by Capeco. This law, while correcting errors from previous regulations and aiming to combat corruption, also poses challenges in areas such as Government-to-Government agreements, which must be used cautiously and judiciously according to Valdivia. In conclusion, although the construction sector in Peru shows signs of recovery and growth, it is essential to address challenges related to government efficiency and trust in authorities to ensure sustainable development over time. The optimism of builders is tempered by the need to overcome obstacles and work together to achieve solid and lasting growth in the sector.