SANTO DOMINGO- The readjustment of infrastructure project schedules due to increases in interest rates, a conservative attitude in public investment and high prices in materials, continue to disadvantage the Dominican construction sector, which in the first quarter of this year presents negative figures.
The Preliminary Economic Report for the period January-March 2023, from the Central Bank of the Dominican Republic (BCRD), indicates that construction, along with mining and quarrying, were the two economic activities that experienced the greatest decline during the period January-March 2023, with negative results of 3.5% and 3%, respectively, compared to January-March 2022.
It states that the rise in the cost of construction inputs has caused an increase in housing prices, in a context in which the gross domestic product contracted by 4.7 percentage points, from 6.1% in January-March 2022 to 1.4% in this quarter.
Sales volumes of metal structures (which had closed in the red with -0.6% in January-March 2022) contracted by 5.6 percentage points more, for a drop of -6.2%, says the BCRD report.
This was followed by cement, which decreased to -2.8% in this first quarter, after having maintained a sales rate of 2.9% in the same period of 2022.
However, the 22.9% increase in the volume of asphalt cement imports and the 26.9% increase in sales revenue from the rest of the materials stand out.
In the case of mining and quarrying, the expansion of copper production by 70.8% lessened the negative result of the activity, from -18% in January-March 2022 to -3% in January-March 2023.
Paint sales fell by 17.9 percentage points, from 19% in the first three months of last year to just 1.1% in the first quarter of this year, while plaster manufacturing fell to -32.5%, after having grown by 21.8% last year, followed by silver production (-11.6%), gold (-5.4%) and sand, gravel and pebbles (-2.8%).
The report highlights that during the first quarter of the year, significant civil engineering and road infrastructure projects were undertaken by the Government. It emphasizes the construction, reconstruction, and rehabilitation of streets, avenues, highways, and rural roads in some areas of the country, such as the reconstruction of the Santiago Rodríguez-Martín García-Guayubín highway in Monte Cristi and the Bayaguana-El Puerto highway; the construction of the Moca-Jamao municipality highway in Espaillat province; and the bypasses of Baní, Azua, San Francisco de Macorís, and Los Alcarrizos.
The report indicates that resources channeled through the financial system for the construction and acquisition of housing reached the sum of RD$407,542.9 million in March 2023, which
was 13.2% higher than the same period of the previous year.
Greater growth
In terms of added value, the economic activities with the greatest increase in activity during January-March 2023 were hotels, bars and restaurants (14.2%), health (9.7%), financial services (6.6%), public administration (5.3%), communications (5.2%) and real estate and rental activities (4.9%), among others.
However, when comparing their results with those obtained in the first three months of last year, only the agricultural sector (3.7%), financial services (6.6%) and real estate and rental activities (4.9%) exceeded the growth achieved in the quarter of 2022.
In its report, the Central Bank notes that the accumulated result for the first three months of the year reflects the effectiveness of the measures implemented to contain the rise in inflation.
The monetary authority expects the Dominican economy to recover its growth rate in the second half of the year.
