Argentina construction inflation slowed in January but remains sky high

Inflation in Argentina’s construction sector slowed down in the monthly comparison in January, but annual figures remain above 200% in two provinces.

In Greater Buenos Aires, which encompasses the capital and 24 surrounding municipalities, sector prices rose 15.5% month-on-month, down from 30.1% in December, but was 252% year-on-year, according to statistics bureau Indec.

Materials costs were up 13.2%, labor costs 19.3% and general expenditures 15.2%. 

Córdoba's provincial statistics office reported a 19.6% monthly increase and 227% annual hike. 

Mendoza province has not yet released the figures, but local sector association Red Edificar said its own index showed a 7.89% increase in January, compared with 44.3% in December.

Red Edificar said the drop was caused by falling demand and cited figures by national medium-sized companies association CAME that showed a 31.3% decline in retail sales of construction materials. 

Nationwide, sector activity fell 12.2% year-on-year and 8% month-on-month in December.

President Javier Milei's administration has slashed public infrastructure investment, aiming to encourage private investment.

By February, 3,500 projects had reportedly been paralyzed because of lack of financing, and national construction chamber Camarco declared a state of emergency for the sector, warning of looming mass layoffs.