SANTO DOMINGO- The sale of construction materials has experienced a reduction of between 40 and 50% in the last month, in relation to the normal margins that hardware stores handle, assured engineer Arturo Espinal, president of the Dominican Association of Hardware Stores (ASODEFE) yesterday.
The Central Bank of the Dominican Republic, in its report on the performance of the various sectors that drive the national economy, placed the construction sector with only 1.9% growth during the period January-July of this year.
Espinal asserts that the Dominican market currently has an oversupply, due to the significant decrease in sales, which in his opinion contributed to price reductions in some inputs such as steel.
“Generally speaking, there is an oversupply of imported goods because demand has decreased, sales have fallen, this factor possibly caused the price of steel to drop, with a large supply and reduced demand,” the union leader pointed out.
He said that the price of construction materials has remained stable in recent weeks, with a downward trend, citing the case of imported rebar that decreased from RD$85,000 per bundle to RD$75,500, although he clarified that they have not yet received notification of a price change for domestic production.
Eliseo Cristopher, president of the Confederation of Micro, Small and Medium Construction Companies (Copymecom), denied that the materials have gone down and that in fact the entity he represents has been warning about the rise in construction materials.
“In fact, steel is one of the items that has risen the most. If it has gone down in the last two days, perhaps, it's because we have bought quite expensive steel, exceeding 85,000 pesos per ton, which means that this item, which is one of those that most affects the construction sector, has maintained an upward trend,” he explained.
He emphasized that “materials are not going down, on the contrary they continue to rise and that aggregates continue to maintain an upward trend, as do steel and other products.
In his opinion, micro, small, and medium-sized enterprises (MSMEs) are among the sectors most affected because they rely on future resales. “And when you sell at one price only to then sell it at another, negotiations become very difficult because the buyers are from a very vulnerable segment of society; they are people who cannot afford to pay.”.
The builders
Engineer Hector Breton points out that the price of steel has certainly begun to fall in the market and explains his opinion on the possible reasons:
“The anti-inflationary measures being taken worldwide, such as the increase in interest rates, have led to a decrease in freight costs from China, which a year ago were US$15,000 and are now US$8,500, and the dollar, which a year ago was at 57.11 and is now at 53.30,” declared the professor of Cost Engineering in the Master's program in Construction Management at the Technological Institute of Santo Domingo (INTEC).
He said he expects a reduction in both imported and domestically produced materials, which will impact the direct cost of housing and therefore reflect a decrease in the prices of new projects.
“Suppliers of light machinery, ceramics, porcelain, locks, and others have already begun offering discounts so they can clear their inventories as quickly as possible, since new merchandise will arrive at a lower cost,” the businessman pointed out.
Headache of the sector
In July of this year, El Inmobiliario, a digital newspaper, compiled a list of more than 30 items, whose prices had registered increases from 7 to 250%, becoming a headache for the actors in the sector and generating problems in one of the pillars of the national economy.
The price of steel bundles increased by 70%. In 2020, this material was sold for RD$49,500, while its price was around RD$84,000.
