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Construction recalls its ills with Covid: 11% of the sector is close to bankruptcy

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Despite the fact that construction only had to stop operating for two weeks, part of the sector is reliving the ills that hit it in the 2008 financial crisis. So much so that 11% of companies are in default, according to a study carried out by the insurance company Pouey International, in which it has analyzed 201 Spanish construction companies.

"The construction sector is experiencing financial problems derived from the slowdown in the economy and the reduction in the order book," points out the Operations Director of Pouey International, Pierre Lemarquier. In his opinion, "allowing the companies that were carrying out works to go bankrupt implies high costs to resume the works and greater delays in its completion."

There are already some examples in this regard. In fact, 68 construction companies were liquidated in April, according to the figures provided by the National Statistics Institute (INE). This is 17% of all the companies that ceased their activity during that month, which places construction as the second most affected sector, only behind the trade where 80 companies closed permanently.

And the uncertainty remains in May, increasing even the levels of pessimism. As seen in the Construction Climate Indicator (ICC), confidence in the sector stood at -39.4 points, that is, 8.3 points less than in April. By subsectors, in the construction of buildings it fell to -47.3 points, while in specialized activities it stood at -41.5 points) and in civil works it fell to -29.9 points.

However, this crisis will not be as catastrophic as that of 2008. During the alarmed state, IEB professor Javier Santacruz, he explained to 'Bolsamanía' that it is very difficult to repeat the same situation as a decade ago because "the granting of mortgage loans has been restricted, especially developer loans, and the indebtedness of construction companies."

THE SECTOR ASKS FOR POLITICAL CONSENSUS

With these data on the table, the sector asks the Government and the opposition to reach political consensus to develop a restructuring plan and approve budgets that boost investment in infrastructure. "We will only get out of this with a massive investment in infrastructure," said the president of the National Construction Confederation (CNC), Juan Lazcano, during the business summit held by the CEOE.

He also called on public institutions to regain public-private collaboration in financing construction projects. "We cannot continue avoiding the debate on the need to reduce the burden that citizens bear to finance their infrastructure," Lazcano defended. And in the same line the president of Sacyr, Manuel Manrique, noting that "public-private collaboration is going to be the engine of reconstruction".

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