Public works carrying Peru's construction sector

Peru’s construction sector grew 6.41% year-on-year in February, with public works – representing 23.3% of sector GDP – registering overall progress of 36.6%.

Cement consumption, a proxy for private projects, representing 74% of sector GDP, fell 0.72%, official data shows. Despite positive signs earlier in the year, private projects still face uncertain progress. 

Cement producers association Asocem, which represents Unacem, Cementos Pacasmayo and Yura, among others, estimates consumption fell even more drastically in March – 8% to 897,000t, the second lowest figure in recent months, only behind February with 887,000t. 

Based on Asocem data, cement consumption should have reached almost 2.80Mt in the first quarter, compared to 2.81Mt in the year-ago period.

Month	1Q23 Production	1Q24 Production
January	928,000t	1,015,000t
February	904,000t	887,000t
March	980,000t	897,000t
Total	2,812,000t	2,799,000t

Source: Asocem

OUTLOOK

Economics think-tank IPE said sector GDP grew 6.6% year-on-year in 1Q24 and public investment 45%.

Private sector works will overtake publicly funded ones, an IPE report said. "Public investment would slow down in the face of lower expenditures due to the El Niño phenomenon and reactivation measures, especially as fiscal sustainability will be a priority." 

IPE expects sector growth of 3.4% this year, supported by falling interest rates and prices for inputs.

A Scotiabank report said local governments have settled in, after starting their terms last year, enabling them to make good progress in the first months of the year.