The economist attributes the sector's dynamism to increased investment, credit, and public works projects, although he warns about the impact of labor costs and financial conditions
SANTO DOMINGO. – The construction sector is maintaining a favorable trajectory during 2026 and could close the year with growth between 7% and 9%, driven by increased public and private investment, greater financing, and the recovery of economic activity, according to economist Alejandro Arredondo.
The activity registered a year-on-year growth of 14.9% in June and 8.1% in July, figures which, according to the specialist, show that construction continues to play a relevant role within the Dominican economy.
“My personal projection is that construction could close 2026 with high single-digit positive growth,” said Arredondo, who considered an annual expansion scenario of between 7% and 9% reasonable, provided that current investment, credit and construction conditions are maintained.
The expert explained that the sector's behavior is due to several factors, including the recovery of private investment, especially in residential, real estate and tourism projects, as well as the increase in public investment.
“We are seeing the convergence of greater investment, more credit, execution of public works and a general recovery of economic activity,” he said.
More credit for construction
One of the elements that Arredondo considers crucial to explaining the sector's performance is the behavior of financing.
According to data cited by the economist, credit for construction registered a year-on-year growth of 22.6% at the end of June, representing more than RD$34 billion in additional funds compared to the same period of the previous year.
For professionals, this increased flow of financing facilitates the availability of resources to develop new projects and continue with ongoing works.
Added to this is the behavior of public investment, whose execution reached RD$60,644.1 million during the first half of 2026, strengthening the demand for goods and services linked to construction activity.
The economist also highlighted the importance of streamlining processes related to building permits and facilitating access to mortgage financing to maintain the dynamism of the sector.
The salary increase: positive, but with challenges
Regarding the recent 20% increase in the minimum wage for construction workers, Arredondo positively assessed the measure, although he noted that it should be analyzed considering the impact it will have on the cost structure of companies.
“The 20% increase approved for construction workers represents an important step forward in protecting and restoring the purchasing power of thousands of people,” he said.
He also highlighted that the decision was the result of dialogue between workers, employers and the State, considering that this mechanism allows for a balance between better wages and the ability of companies to absorb the new costs.
However, he warned that some of the increase could end up being reflected in project prices.
“A salary increase represents an increase in production costs,” Arredondo explained, noting that companies will have to seek higher levels of productivity and efficiency to absorb part of that impact.
He believed the challenge would be to prevent rising labor costs from ultimately affecting housing affordability.
“The challenge is to prevent a socially positive measure from ending up generating a disproportionate increase in construction costs or affecting access to housing,” he pointed out.
A sector with favorable prospects
Arredondo believes there are grounds to remain optimistic about the performance of the construction sector in the coming months, although he clarifies that the growth rate could vary from month to month.
Among the main risks identified are the evolution of interest rates, the behavior of international prices of materials and inputs, and geopolitical tensions that could affect international economic conditions.
Despite these factors, he believes the scenario remains favorable for Dominican construction, particularly if the flow of investment and financing is maintained.
“For the construction sector, it is extremely important to facilitate access to mortgage financing and maintain adequate public investment to sustain the sector's expansion,” he stated.
He added that an even more favorable scenario could materialize if financing continues to increase, real estate and tourism investments are maintained, and access to mortgage credit improves.
In this way, construction is once again emerging as one of the key sectors to sustain Dominican economic growth during 2026, in a context where investment and credit have begun to regain prominence.
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