Argentina's construction sector struggles amid lack of economic spillover, needs massive investment for growth

Argentina's construction sector is in a deep slump, with activity plummeting 25% over the past year, according to Gustavo Weiss, president of the Argentine Construction Chamber (Camarco).

Weiss stated that while the sector has stabilized since mid-2024, there is no "spillover" of economic benefits from booming sectors like energy, mining, and agriculture to struggling areas such as construction, commerce, and industry. He noted that the construction industry has lost 120,000 jobs in recent years, with only a minimal recovery of about 5,000 positions.

The lack of public investment is a major concern. Weiss explained that the national government has ceased investing in public works, with only a few jurisdictions like the City of Buenos Aires and the provinces of Buenos Aires and Neuquén maintaining investment levels. This is insufficient to offset the national decline.

Weiss emphasized that private investment alone cannot fill the gap, as it typically accounts for no more than 15% of total infrastructure investment globally due to profitability issues. He cited the example of national routes, where only 9,000 of 40,000 kilometers are being concessioned because the rest lack sufficient toll revenue for financing.

To achieve the government's goal of sustained 4-5% annual economic growth, Argentina needs to invest the equivalent of 25% of its GDP, or approximately $150 billion, each year. This investment should be allocated to public infrastructure maintenance (3%), new public infrastructure (3%), private energy and gas infrastructure (3%), housing (6%), and industrial equipment (10%). Currently, public investment is only around $4 billion annually, far short of the required $36 billion.