Infrastructure in Argentina Current Demand Behavior Analysis¶
Demand Behavior¶
The final customers of the Argentine infrastructure value chain are broadly categorized into Business-to-Business (B2B) and Business-to-Consumer (B2C) segments. [Final Customers Identification]
The B2B segment includes businesses, institutions, and government entities acting as users of operational infrastructure. [Final Customers Identification] Businesses across various sectors (commercial, industrial, agricultural, mining) rely on transport infrastructure (roads, railways, ports, airports), energy networks (electricity, gas), water and sanitation systems, communication networks, and commercial/industrial buildings for their operations, logistics, and production. [Final Customers Identification] Institutions like hospitals and schools utilize infrastructure for their facilities and essential services. [Final Customers Identification] Government bodies also use infrastructure for administrative and service delivery roles. [Final Customers Identification] The demand from B2B customers for infrastructure-dependent services is closely tied to overall economic activity and industrial output. [Final Customers Identification]
The B2C segment comprises individual consumers and households who directly use infrastructure services for personal needs. [Final Customers Identification] This includes using transport infrastructure for personal travel (roads, public transport like subways and railways, airports), and receiving essential utility services at home (water, sewage, electricity, gas, communications). [Final Customers Identification] This segment represents the general population whose quality of life is directly impacted by the reliability and accessibility of infrastructure. [Final Customers Identification]
While the provided reports do not offer precise figures on the total number of individual or business final consumers or their growth rates, they provide strong evidence of a significant decline in demand within the infrastructure value chain for new projects and maintenance activities, particularly from the primary clients (government and private developers).
The most significant factor impacting demand within the value chain is the drastic reduction in public investment. [Value Chain Analysis] Real direct national government investment in provincial infrastructure fell by 73.4% in 2024, reaching a 20-year low, with infrastructure constructions representing 62% of this investment and falling by 73.9%. [Value Chain Analysis] This collapse in government spending, historically the largest client for large-scale infrastructure projects, has paralyzed demand in the Construction & Execution stage, leading to project suspensions and cancellations. [Value Chain Analysis] This reduced demand for construction directly impacts the demand for services from Engineering & Design firms and for products from Material & Equipment Suppliers. [Value Chain Analysis]
Economic instability, including high inflation and recession, further dampens private sector demand for construction projects (such as new buildings), contributing to the overall decline in demand experienced by the industry. [Value Chain Analysis]
The impact of this reduced demand from clients on the infrastructure sector is clearly reflected in several indicators for 2024 and 2025:
- The synthetic indicator of construction activity (ISAC) showed a year-on-year decline of 21.7% in January 2024. [Value Chain Analysis]
- Over 120,000 jobs were lost in the construction sector between mid-2023 and mid-2024, with around 4,000 firms ceasing activity. [Value Chain Analysis]
These figures demonstrate a severe contraction in the industry's activity, which is a direct consequence of the collapse in demand for infrastructure development and maintenance from its clients. Although the reports do not quantify the exact number of final B2B and B2C customers or their rate of growth or decline, the shrinking capacity and activity within the infrastructure sector due to reduced demand from clients inherently impacts the potential to expand services or even adequately maintain existing infrastructure serving these final consumers. The trend observed in the industry, driven by declining demand for construction and development, indicates a significant contraction from the supply side perspective, reflecting a severe bottleneck originating from the demand placed by the sector's direct clients.
| Customer Segment | Growth/Decline in Number of Customers (Based on Industry Activity) |
|---|---|
| Businesses (B2B) relying on new/maintained infra | Declining access to expanded/improved infrastructure |
| Individuals/Households (B2C) relying on new/maintained infra | Declining access to expanded/improved infrastructure |
| Firms providing infrastructure services (Supply Side) | Declining (Job losses, firm closures) [Value Chain Analysis] |
| Clients demanding new infrastructure (Government, Private Developers) | Severely Declining (Public investment down 73.4% in 2024) [Value Chain Analysis] |
Note: The table reflects the impact on access to new/improved infrastructure for final customers and the decline in the number of firms providing services, directly linked to the severe decline in demand from clients within the infrastructure value chain.
References¶
Construmis - Desafíos para el 2025 en el sector de la construcción: 120 mil empleos perdidos y una lenta recuperación en marcha. BNamericas - Los proyectos de infraestructura detenidos en Argentina. El Economista - Rocca elogió los progresos de Milei, pero advirtió: "Hoy Argentina tiene entre 10 y 20 veces la conflictividad de otros países". BBVA Research - Argentina: financiando la brecha de infraestructura. Mordor Intelligence - Mercado de la Construcción en Argentina, Informe 2025-2034 | Cuota, Análisis. Fundación de Investigaciones Económicas Latinoamericanas - ARGENTINA: INFRAESTRUCTURA, CICLO Y CRECIMIENTO.