Peru: Construction sector remains resilient—cement consumption expands for a sixth consecutive quarter
Cement sales continued to outperform market expectations in the first quarter of 2026 (1Q26), posting double-digit growth for the sixth consecutive quarter. Total cement consumption reached 3.26 million metric tons by end-1Q26, representing a 13% y/y increase versus 1Q25, according to the Peruvian Cement Producers Association (ASOCEM). This marks the strongest first-quarter performance since 1Q22, reinforcing the view of a sustained recovery in construction activity.
The solid performance was underpinned by several factors:
1. Continued momentum in self-construction, supported by:
- The positive performance of formal private employment, which expanded 5.3% y/y in January,
- The continued use of pension fund withdrawals, which has provided additional liquidity to households.
2. Sustained strength in the formal residential real estate market, as new mortgage loan disbursements by the banking system increased 11% year-over-year during the first two months of 2026, compared with the same period in 2025.
3. Ongoing execution of concession-based transport infrastructure projects, with recognized investment reaching USD 203 million as of February 2026, significantly exceeding the USD 45 million recorded in the same period of 2025.
4. Price stability of cement, particularly in Lima, where cement prices declined 0.4% year-over-year in February, according to INEI data, supporting demand dynamics despite broader cost pressures.
That said, cement demand was partially constrained by weaker public investment in the first two months of the year, which declined by approximately 3% in cumulative terms, mainly reflecting lower execution by the central government. This contrasted with improved investment performance at the subnational level, which provided some offset.
March performance
In March, demand conditions mirrored those observed during the quarter as a whole. Cement consumption reached 1.11 million metric tons, up 17% year-over-year, making it the strongest month of the quarter and marking the highest growth rate since December 2025. Compared with prior years, March 2026 also delivered the highest volume since March 2022 (1.15 million metric tons), underscoring the breadth of the recovery.
Outlook for 2026
Looking ahead, we expect cement consumption to grow slightly above our baseline projection of 5.7% for the overall construction sector in 2026. This outlook is supported by:
- Sustained activity in the self-construction segment, underpinned by continued growth in formal private employment and the lingering impact of pension fund withdrawals—particularly relevant in early 1Q26.
- Continued demand for high-value residential housing, especially in Lima, supported by mortgage interest rates that remain below pre-peak levels.
- Strong cement demand from large-scale infrastructure projects, primarily concession-based developments, and to a lesser extent, projects executed under the Works for Taxes framework.
However, upside potential is moderated by several downside risks:
- A deceleration in public investment growth, particularly at the central government level, associated with the electoral cycle between April and June.
- Adverse weather risks linked to a potential El Niño event, which could generate food price inflation and weigh on household purchasing power, potentially constraining expenditure on labour and construction materials within the self-construction segment.
—Carlos Asmat
DISCLAIMER
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.