09 June 2020
Construction sector, automotive sector, and shopping centers progress in reactivating operations

Construction Sector

 

Since the Government authorized the construction sector to resume activities (as of April 27), the Colombian Chamber of Construction (CAMACOL, as per its Spanish acronym) has recorded 2,180 construction active projects as of May 19, which represent 84% of all projects and allow the return of 550,000 workers.

 

According to CAMACOL’s data, the construction sector represents 9% of GDP, makes up 54% of Colombia’s business sector, directly and indirectly employs 14% of the workforce, and is responsible for monthly investments equivalent to US $7.5 trillion in both housing projects and non-residential activity.

 

Reinitiating activities has led to a positive balance, thanks to teamwork with local authorities, as per CAMACOL’s reports. In fact, by the end of next week, between 95% - 100% of construction projects are expected to be back in operation.

 

Reactivating construction projects and manufacturing construction materials is important in Colombia, given that it will reduce the housing deficit. A recent study prepared by the National Department of Statistics (DANE, as per its Spanish acronym), the Ministry of Housing, and the National Planning Department (DNP, as per its Spanish acronym), with the support of UN-Habitat, determined that Colombia has a housing deficit of 36.6%—lacking in both quantity and quality. Of 14,060,645 Colombian households, 9.8% (1,378,829) lack housing, while 26.78% (3,765,616) lack adequate-quality housing.

 

Automotive industries

 

As of May 11th, establishments involved in the production, supply, storage, repair, and maintenance of vehicles and motorcycles were authorized to resume activities. The wholesale and retail sale of motor vehicles and motorcycles, including parts, pieces, and accessories, was also approved.

 

This sector is important to the economy since it also promotes activity in other related sectors such as dealers, auto repair shops, insurance companies, gas stations, maintenance centers, tire centers, car washes, and spare parts warehouses.

 

The latest figures for the sector published by the National Association for Sustainable Mobility (ANDEMOS, as per its Spanish acronym) show that in the first four months of 2020, vehicle sales amounted to 51,481—a 31% decrease compared to the same period in 2019. Meanwhile, 148,488 motorcycles were sold, equaling 24% less than in 2019.

 

By resuming activities related to the automotive sector and implementing mechanisms that facilitate online procedures, sales of vehicles and motorcycles are expected to increase. According to ANDEMOS, the sales forecast for 2020 is a total of 190,000 units.

 

Due to the health emergency in effect until August 31st, Colombia’s borders will stay closed from June 1-30. Additionally, inter-municipal ground transportation, as well as domestic and international commercial flights, will be banned.

 

Shopping centers

 

In addition to announcing three dates in which products can be purchased without VAT, on May 24th authorities announced the reopening of shopping centers starting June 1st. The Minister of Trade, Industry, and Tourism explained that shopping centers must comply with the following measures: guarantee a maximum capacity of 30%; maintain a social distance of 2 meters in places where lines are formed; keep a thorough record of people entering the shopping center; and use protective equipment and implement hygienic measures throughout the establishment.

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