SANTO DOMINGO– The price reductions seen on some construction materials in the international market have not yet been reflected locally. Some are waiting to deplete their existing inventory before placing orders, while others have already renewed their purchases and say the discounts have been minimal and nothing like the pre-pandemic situation.
In three hardware stores consulted yesterday by El Inmobiliario the prices of basic items for the construction sector remain sky-high, and their representatives express despair at the "paralysis" of the sector, which they claim is the one that drives the national hardware industry.
Some prices, like those for bundles of steel, are higher than they should be after the announced reductions. For example, in two hardware stores, the price is around $84,000 and $96,000 pesos, respectively. The last price reported was $85,000 pesos, which had been reduced to $75,000.
At the San Miguel Hardware Store on Independencia Avenue in Santo Domingo, the price reductions only apply to bags of cement and some types of PVC pipe. Cement is now selling for 450 pesos, down from 455, while the price of PVC pipe has only seen a slight decrease, explains Alejandro Montero, the inventory manager.
“There is a recession, the construction sector is paralyzed and it is the one that drives the hardware stores, everything else moves more slowly,” explains Montero, who maintains that aggregates have not decreased at all and that since the arrival of the current minister Miguel Ceara Hatton, to Environment and Natural Resources, these materials have not decreased in price.
At Ferreteria Cima on Avenida Núñez de Cáceres, cement used to cost 515, now it costs 480; a bundle of rebar used to cost $100,000, now it costs $84,000; in the case of aggregates, one of its variants that used to cost $850 now costs around $1,300.
“Actually, the inventory manager told us that purchases were stopped because prices are too high,” explained Melvin Maria, a salesman, by telephone.
Criselda Fortuna, from Papaterra Montolio wholesale, states that the situation is complex because international suppliers set prices based on the high cost of freight and say that as long as they run out of stock, they will continue without variation.
He says that out of more than 3,000 products, only 100 have experienced a decrease, and not a significant one, citing the case of electrical wires.
At José Minaya Hardware Store in Ensanche La Fe, a bag of cement costs $550, the plaster mix that used to cost $250 is now sold for $350, and the glue is $300 per bag, up from $210, declared Lisbeth Gil, a saleswoman.
What Copymecom says
The president of the Dominican Confederation of Small and Medium Construction Companies (Copymecon) believes that the country has not implemented mechanisms and measures to mitigate the impact of high prices in the sector.
“For example, we saw during the pandemic how the United States injected more than $10 trillion to keep the construction sector active,” he explained yesterday in an interview with Diario Libre.
He believes the price drop in construction materials doesn't immediately affect homes, but rather those to be delivered in the coming months. "We sell homes for future construction, and the homes that will be delivered in 12 to 14 months, which are being sold now, we will deliver them with the price reduction we're currently experiencing," Cristopher explained.
Construction with timid growth
In its January-September report, the Central Bank places the construction sector at just 2.2%, after having accumulated 23.4% last year, when it ended up as the second sector that generated the most contributions to the Dominican economy.
What the builders say
Two representatives from the construction sector described the situation facing the sector as complex, noting that the discounts some materials have experienced do not reflect the price increases they experienced during the pandemic. They cited the case of steel, which increased in price by more than 30% and did not even drop by half of that increase.
Juan Chalas of Cyj Ingenieros and José Jiménez Bloise of Roaldi Constructora spoke to El Inmobiliario last Monday, where they referred to the unforeseen events that their companies have had to face, such as the rise in minimum wages, the increase in interest rates, the increase in the cost of labor, which together with the rise in the prices of materials has generated a complicated scenario.
