Builders anticipate being affected by imminent rise in interest rates

Guadalajara, Jalisco. Inflation caused by the rise in most inputs, and the imminent increase in interest rates to counteract it, will hit the construction industry, mainly housing developers, anticipated the president of the Mexican Chamber of Industry of Construction (CMIC) in Jalisco, Carlos del Río.

“Possible increases in interest rates can generate some adverse effect for the construction sector since, above all, mortgage loans and the purchase of real estate are beginning to get complicated,” he said.

Del Río Madrigal explained that only steel increased its price by 100% in the last year, although the rise, he said, occurred in almost all the inputs used by the industry such as cement, concrete and wood.

“The price of fuels also directly impacts the construction industry due to freight and hauling,” he said.

Despite warning that 2022 will be a year with “great challenges ahead”, the president of CMIC Jalisco ruled out the cancellation of the main investment projects, both public and private.

He recalled that, for this year, the state government will make a “historic investment” in public works for 14.8 billion pesos, a figure that would help cushion the fall in the federal budget and the drop in private investment.

“In private investment, we have been talking to investors and, in fact, some are already planning to resume their investments, now we have to see how the issue of interest rates behaves, but they are analyzing their investment plans already taking into account account these possible contingencies,” he said.

For now, he said, despite the wave of Covid-19 infections and the arrival of the new Omicron variant, so far the health contingency has not affected the industry.

The president of CMIC was interviewed in the framework of the delivery of the ESR Distinction (Socially Responsible Company) to 23 construction companies affiliated with the chamber.

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Reference-www.eleconomista.com.mx

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