Argentine construction firms face uncertain times as layoffs pile up

Construction firms in Argentina are experiencing uncertain times following the decision of President Javier Milei to stop public funding for most infrastructure projects, with reports of mass layoffs. 

“While a dialogue with the government has begun, and there was a meeting with [economy] minister [Luis] Caputo a few days ago, there’s still uncertainty around this,” a source from the country’s construction chamber Camarco told BNamericas on condition of anonymity.

The government scrapped the infrastructure ministry this week, and its functions were passed to Caputo’s office. 

Camarco declared a national state of emergency for the construction sector earlier this month following Milei’s clampdown on public works, which worsened an already dire scenario for contractors facing high inflation and financing issues. 

The chamber’s head Gustavo Weiss told El Diario AR that it is estimated that 100,000 jobs have been lost since November mainly due to the halting of around 3,500 public works contracts.

When Camarco issued its emergency declaration, it warned that up to 200,000 jobs were at risk.

The same source at the chamber told BNamericas that the number includes both layoffs and suspensions at projects that are halted or are under construction but at a much slower pace than before.

Private sector projects are also affected, albeit to a much lesser extent.

Provincial authorities have also raised their voices since their funding has been affected by Milei’s fiscal austerity, impacting their ability to fund infrastructure projects.

As of Tuesday one federal judge had ruled in favor of Chubut province over funds that are being withheld by Milei, though the federal authorities will appeal to the supreme court, news outlet C5N reported quoting government sources. 

Construction activity in Argentina shrank 12.2% year-on-year in December, when Milei took office, while over two thirds of firms focused on public works projects believe that activity will fall during the first quarter of 2024, according to statistics office Indec.

Inflation in the sector slowed during January but is still running at over 200% annually in Greater Buenos Aires and Córdoba province.