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Chile's construction sector shows signs of stabilization after prolonged recession

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Chile's construction sector, which has faced a prolonged recession, appears to be showing signs of stabilization according to a report by Infor. The Monthly Construction Activity Index (IMACON) recorded a year-on-year variation of just -0.02% in February 2025, which could indicate a trend toward stabilization after 33 consecutive months of annual declines.

Since October 2024, IMACON has shown positive variations, albeit below 1%, suggesting a moderation in the sector's decline in activity.

This trend is partially reflected in the prices of forest products demanded by the construction sector. In February 2025, MDF board saw a slight year-on-year increase of 0.29% in its real price, while sawn timber and MDP boards recorded the largest price drops, with declines of 4.5% in both cases.

The slowdown in the decline of construction activity could be linked to successive cuts in the Monetary Policy Rate by the Central Bank of Chile, which affects the cost and access to mortgage credit. Additionally, the implementation of the MINVU's Emergency Housing Plan appears to have had a positive impact.

Sector indicators also show encouraging signs. The Chilean Chamber of Construction projects a 1.1% increase in investment for 2025, with a projected 3.1% expansion in public investment. Similarly, the Wholesale Construction Materials Sales Index recorded a year-on-year increase of 3.1% in February.

Regarding building permits, January and February 2025 saw a cumulative increase of 19.8% in total authorized surface area and 23.4% in residential surface area, which is directly linked to the demand for lumber and boards.

These figures could signal the beginning of a recovery in the construction sector, which would have a significant impact on the national economy, given the sector's importance as a consumer of forest products and its role as a driver of growth and employment.