Sun. Mar 29th, 2020

The economic weight of the construction prevents it from being approved for paralysis by the coronavirus



Construction is one of the sectors that remains active during the state of alarm caused by the coronavirus crisis. The major works, and others of lesser magnitude, continue with some protection measures for workers that according to union organizations are insufficient. For this reason, they ask that this activity be stopped, coinciding with many companies and professional associations.

The Colleges of architects and engineers agree on this claim to the Government. Also requested by City of Madrid. Companies want to be able to take advantage of the activity stops due to force majeure due to the pandemic, as well as sectors such as commerce, and thus be able to take advantage of special conditions awarded by the Government to try to deal with this crisis without destroying jobs through ERTES. Only in the event that their billing has fallen 75% in the last month can they use this measure.

But the Executive is not ready at the moment to completely stop construction, which accounts for 10% of Spanish GDP and employs 1.2 million workers. Government sources assure eldiario.es that the royal decree which determined the cessation of certain activities such as restaurants and shops, seeks a balance between reducing the risk of infection and affecting the productive economy as little as possible. And remember that they also continue working in factories, in the fields or on fishing boats.

For his part, the Minister of Health, Salvador Illa, has justified the continuation of works in essential services such as transportation, food or the provision of medicines. Although the construction would not fit within those essential services.

The employers’ association of the construction companies says that it does not want to stop either. Despite the fact that the contrary has been published, the Association of Construction Companies and Infrastructure Concessionaires (Seopan) has released a statement this Wednesday in which it advocates continuing its activity with the argument that the opposite would remain “close to a point percentage of annual “GDP in just one month.

“The construction and infrastructure sector has a huge impact on our economic and social development, given that it is the productive sector that generates the greatest induced economic activity in our economy (1.92 euros for every euro invested) and also presents the lower import quota “, emphasizes the employers.

But the organization does expect the government to adopt measures to support the sector. Seopan requests an automatic extension of the contract execution period to compensate for the work time that may have been lost due to “the slower production rate due to the pandemic”.

Likewise, and in the case of public administrations, it proposes specific measures, such as authorizing advances on account during the state of alarm, to be deducted entirely from future certifications after the end of the period.

In Seopan’s opinion, this measure, “in addition to not involving consumption of additional public resources, would benefit all suppliers, subcontractors and self-employed workers, which would also be a relief for the allocation of the line of guarantees recently approved by the Government in the Council of Ministers “.

Many small works do stop

The truth is that many small works, for example in private homes, have made a parenthesis. Sergio Blázquez owns a small construction and renovation company in Madrid with his brother, in which they employ a third assistant. Until the eve of the declaration of the state of alarm (Saturday, March 14) they were renovating the kitchen and bathroom in a house, a task that they had to leave halfway. Although it is not prohibited to carry out works, they fear that the neighbors will denounce them if they are going up and down the stairs of the building, in addition to the fact that the very warehouses where they acquire material, such as Bricomart or Leroy Merlin, have closed.

In addition, his brother is on leave with respiratory symptoms, while he himself has accepted a cessation of activity as a freelance and the person they have hired has had an ERTE applied. “Yesterday I went to our warehouse to check that the material is still in good condition, and when I returned home the police made me open the van. They asked me if I was going to work. They don’t stop the work, but they don’t want people to work” .

The Madrid City Council does not have the capacity to directly stop the works in progress, but it has started inspections to verify that all the sanitary safety measures are met (masks, gloves, distance …). In Barcelona, ​​the consistory has suspended 72 actions in municipal facilities and public housing promotions, while prohibiting the continuation of private actions that do not guarantee security measures.

But what about other major works? “I am sure that many companies would stop, but they have penalties if they do not meet on the agreed dates and the developers do not want to stop because they start losing money if they do not deliver on time,” says a former employee in the management area of ​​a large construction company.

Also on condition of anonymity, another source in the sector assures that they would be in favor of the eventual closure, but that they depend on the client. “If you stop unilaterally, who is responsible for the payments? You cannot close the works and run away from there.” However, it ensures that they try to comply with all health safety regulations.

The secretary of Trade Union Action of CCOO Construction and Services, Daniel Barragán, questions it. “We receive cases and inquiries from all over Spain that we have reported to the labor inspectorate. People infected without their colleagues having kept the quarantine. Work continues in places without measures, in the locker rooms or dining rooms many people gather, and the bathrooms they are prefabricated booths used by dozens of people. “

Although they have negotiated in several works that a continuous day be made so as not to have to use the dining room and at least the dressing room, they only “are patches”, he says, because “the problem is the pit itself.” CCOO calls for the stoppage of all works, except urgent ones, and that they be carried out with many means of protection. “It does not make sense in the rest of the cases, today the priority has to be health,” says the union member.

Paralysis and threats to return

Fernando is a partner in an SME dedicated to construction, which for the most part is dedicated to interior living, partitioning or installations, with around 100 employees. “The day the government decrees the state of alarm, my partner and I tell ourselves that there is no point in going back to work on Monday and we sent a communication to our clients. Three days later, a large construction company sent us an email in a threatening tone, saying that if we break the contract the payments are paralyzed and we terminate the contract. Others began to call us on the phone with similar arguments. We have had to return to work, although some at the same time tell me that they do not guarantee payments on time. “

The problem, he says, is that a substantial part of his staff is from outside Madrid (where they usually work) and spends the night in hostels during the week, which is now closed. They also don’t have bars or restaurants where you can eat and dine. So they are working decimated. “We also did not meet the requirements to do an ERTE. This month the billing does not fall 75%, the next we will see.”

The government decree specifies that self-employed workers can file a temporary employment regulation file for their workers and request this benefit. The conditions are the same as those of the self-employed without workers in their charge: who have had to close their business due to the state of alarm (in which case these construction companies are not present) or who have seen their turnover fall by 75%. %.

The sector was slowing down

Construction in Spain was already losing steam before this crisis. It chained two quarters in a row negative at the end of 2019, that is, it was in recession, just as other parameters related to housing were slowing down.

But in terms of activity it still represents 10% of the total of the Spanish economy, with a production in 2019 of 124,049 million euros and an occupation of 1.2 million workers. By origin of demand, 12% is public and 78% private, according to Seopan data.

In a month, public works produce an average of 1,233 million euros, with 152,000 direct jobs, while private works produce 9,104 million and 1.1 million direct jobs.

“The economic activity in public works contracts in execution with all the Administrations and public business entities – not including public contracts for supplies, services and concessions – represented in 2019 more than 14.8 billion euros, corresponding to 36% of the Administration General of the State, 28% to the Autonomous Communities and the remaining 36% to local administrations “they point out.

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