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Monday, November 07, 2005

The president of the constructors on Costa Blanca, Ramon Jerez, has in a newspaper interview recently told that there are 11.323 companies working in his sector, with 66.566 employees, without any sign of crisis. To be able to maintain the construction boom, he is demanding the construction of desalination plants all along the coast, to solve the problem of water.

On the 24th of October I referred in this blog to the sharp warning issued by the hotel lobby of Spain, Exeltur, against continuing the present construction activity. Exeltur is afraid this can lead to a crisis in tourism.

The construction companies are not at the sharp end of the property sector. A crisis in the sector will always start in sales. When the sales agents and companies are no longer able to deliver new clients to the promoters, they may go slow on starting new projects. But they will not stop the building projects already sold in a previous period and contracted with the construction companies. From the sale of the dwellings in a building project to its finishing, lies a period of 18 to 24 months.

Reports from all over Spain tell us that sales are slowing down. We are afraid that the continuation of the construction boom and and desalination plants all along the coast will stimulate this trend.