The employer warns that the sector is not capable of returning to pre-pandemic levels and charges against fiscal pressure
Up to 85% of the construction companies in the Region do not want to continue with the projects they have underway and 42% of the promoters would be willing today to return the money from the sales contracts. This was stated this Thursday by the president of the Regional Federation of Construction Entrepreneurs of Murcia (Frecom), José Hernández, who blamed the complex situation in which the sector is currently immersed on the “escalation of prices” and “the delay in the arrival of European funds.
Hernández appeared on the occasion of the General Assembly of Frecom, which took place at the Nelva hotel in Murcia, and warned about the “uncertain future” that hangs over the sector. According to the regional federation, it has not been possible to recover the figures prior to the Covid-19 pandemic. Construction today has, they maintain, a lower added value -0.6% less in 2021 compared to before the health crisis-, and fewer workers, which in 2019 amounted to 42,001 and last year were 40,900.
The construction businessmen hoped to arrive more comfortably at the start of the recovery, since the announced announcement of the ‘Next Generation’ funds raised high hopes. However, they denounce from Frecom, said aid is not being transferred and, therefore, its contribution to the sector right now is non-existent. “We do not know how much, where or how they have arrived. When we met with the Government Delegation they told us that significant amounts had arrived, while the regional Executive, on the contrary, assures us that they have not received anything. The truth is that we have been saying for more than a year that we do not know what the funds are,” Hernández pointed out.
The president of the employers’ association reproached, in this sense, what he considers “unproductive public spending” by the public sector, which “is making it impossible to attend to all those extremely necessary investments such as transport infrastructure or electricity generation and distribution. Energy”. For this reason, and to resolve the arrival of the Covid funds as soon as possible, they will demand “the necessary rigor from both administrations.” “The sector needs less propaganda and more responsible, effective and agile management.”
price escalation
To this is added an escalation of prices that makes the sector glimpse a future, at least, “uncertain”. This increase directly affects everything that construction needs to develop its production. This is the case of materials, energy or transport. “Steel is up 387%; oil a 325; aluminum a 136; and copper, a 97”, Hernández recounted.
Factors that “make no glimpse of a short-term solution” and that, in some cases, assure from the regional federation, “will lead to the paralysis of ongoing projects or will mean that many other companies enter bankruptcy.” In fact, in the Region, they reported from Frecom, the paralyzed public works tenders amount to 14, which is equivalent to 22 million euros that “have been deserted.”
For this reason, Hernández insisted during the press conference that raising taxes is not the appropriate response to the current situation. “The opposite of what we demand is happening,” said the president of Frecom after recounting the taxes increased so far: personal income tax, non-reusable plastic, income from savings capital, registration tax, minimum corporate tax, rise in raw materials and occupation of public roads.
“Armed assault”
This last tax – that of occupation of public thoroughfares – was the one that the president of Frecom made the most emphasis on, who came to describe it as “armed robbery”. “A special tax is already being paid for any work with a fence in the municipality of Murcia,” Hernández assured after denouncing the lack of transparency of said rule and explaining that “businessmen are receiving excessive liquidations of around 300,000 or 400,000 euros” . “It’s a real bomb on the income statement,” he said.
However, the sector has managed to recover some of the levels prior to the coronavirus crisis in 2021, such as the number of home sales. In 2021, for example, this was 19,561, increasing by 30% compared to 2020. The first quarter of 2022, in this sense, “is also showing very favorable data and there is talk of an increase of 32%”, pointed out the President of Frecom.
As far as the number of construction companies is concerned, the barometer carried out by the regional federation indicates that there has been a year-on-year increase of 5% in 2021. However, it is only five more companies than those that emerged in 2020. The successive waves of coronavirus that also took place last year reduced the potential growth that the sector seemed destined to experience then.
Likewise, from Frecom they alluded to the lack of labor that the sector carries, highlighting the fact that a laborer who joins work receives 4,000 euros above the Minimum Interprofessional Salary (SMI), which currently stands at 13,013 euros while said job is paid with 17,400 euros. “They will have a long and well-paid career,” he stressed after recalling that, in the event that the arrival of the funds becomes a reality, they estimate that the sector would require 25,000 new jobs.
reinvent yourself
Likewise, the person in charge of closing the Assembly held, the regional president, Fernando López-Miras, highlighted the two complicated years with which the sector has been forced to deal and highlighted its “ability to reinvent itself”. In addition, López-Miras emphasized that it is a sector that has been affected by all the economic situations that have been happening in this period of time: the paralysis of projects due to the pandemic, shortages or the exorbitant rise in prices of raw materials. .
“The regional government is also trying to adapt to this situation of extraordinary difficulty that has been aggravated by the invasion of Ukraine,” he said, with measures such as “the elimination of regional taxes for the next three months for the sectors most affected by the crisis, including construction.
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