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1045765

Construction in Dominican Republic - Key Trends and Opportunities (H2 2021)

Published: | GlobalData | 18 Pages | Delivery time: 1-2 business days

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Construction in Dominican Republic - Key Trends and Opportunities (H2 2021)
Published: December 9, 2021
GlobalData
Content info: 18 Pages
Delivery time: 1-2 business days
  • Description
  • Table of Contents
  • List of Tables

The Coronavirus (COVID-19) pandemic created significant disruptions to the Dominican Republic's economy, with containment measures bringing many key sectors to a standstill and causing a sharp decline in construction output last year. In the first half of 2021, most sectors started to recover owing to the re-opening of the economy, coupled with increased vaccination. According to the Central Bank of the Dominican Republic (BCRD), the construction industry's value-add index grew by 41% year on year (YoY) in the first six months of 2021.

GlobalData expects the Dominican Republic's construction industry to recover in 2021, growing by 23.3% in real terms - up from a previously estimated growth of 14.5%. This upward revision is attributed to fast recovery in the first half of the year and a rebound in tourism business confidence, coupled with improvement in the overall economy. The tourism sector generated 26.8% more revenue in the first half of the year, compared to the same period in 2020, according to the BCRD. In October 2021, the central bank predicted a high annual GDP growth of 16% for 2021, while UN's the Economic Commission for Latin America and the Caribbean (ECLAC), in early September 2021, predicted only 8% GDP growth. Furthermore, the construction industry is expected to expand at an annual average rate of 5.8% between 2022 and 2025, supported by the government's efforts to raise investment on transport infrastructure, commercial and energy construction projects. In the 2022 draft budget, the government announced plan to allocate DOP46.6 billion (US$794.5 million) towards the transport sector, in an increase of 13.3% compared with the previous budget. The government also plans to allocate DOP56.5 billion (US$962.9 million) towards the energy sector, in an increase of 8.6% compared with the previous budget.

The 2022 fiscal agenda lies in supporting public health and education bodies to cope with the effects of the COVID-19 pandemic, which is likely to bolster consumer and investor confidence - especially in the tourism industry. However, debt-fuelled spending has enlarged the deficit, and future spending plans will be limited by budget cuts or tax hikes to curb the deficit. In addition to fiscal stimulus, the BCRD lowered interest rates from 4.5% to 3.5% in February 2020 to aid the recovery and bolster credit growth. However, a weaking peso, rising energy prices and supply-chain bottlenecks have driven inflation pressure upwards, which could likely result in an interest rate hike in the short term.

Further risk in the economy lies in the energy sector. A heavily reliance on oil imports, coupled with a struggling state-owned energy firm, has put downward pressure on the energy supply in the Dominican Republic, and in some cases has resulted in blackouts. However, a concerted effort by the government to wean the country off oil and invest in renewable technology provides a positive outlook for the sector in the long run.

The Dominican Republic entered a fourth wave of the pandemic in late September 2021. The number of daily new cases is rising, with the country registering more than 500 new cases per day consecutively since 26th October, 2021. This could weigh on investor and consumer confidence, especially given a heavy reliance on tourism. On a positive note, however, the government lifted the state of emergency measures in early October 2021, as vaccination across the country continued to rise. As of 9th November, 2021, more than 50% of the total population had been fully vaccinated.

The industry's output over the forecast period will be supported by the government's focus on developing the country's infrastructure. In September 2021, President Luis Abinader launched an urban planning project called 'Santiago 2025', which involves an investment of DOP42 billion (US$715.4 million) on the execution of new infrastructure works in Santiago over the next four years. As part of the plan, the majority of the investment - equivalent to DOP36 billion (US$613.2 million) - has been allocated for the construction of the Monorail and Cable Car projects.

GlobalData's Construction in Dominican Republic - Country Briefing (H2 2021) report provides detailed market analysis, information and insights into Dominican Republic's construction industry, including -

  • Dominican Republic's construction industry's growth prospects by market, project type and construction activity
  • Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Dominican Republic's construction industry
  • Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Dominican Republic. It provides -

  • Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Dominican Republic, featuring details of key growth drivers.
  • Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
  • Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
  • Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

  • Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
  • Assess market growth potential at a micro-level with over 600 time-series data forecasts.
  • Understand the latest industry and market trends.
  • Formulate and validate strategy using GlobalData's critical and actionable insight.
  • Assess business risks, including cost, regulatory and competitive pressures.
  • Evaluate competitive risk and success factors.
Product Code: GDCN0772MR

Table of Contents

Table of Contents

1 Construction Outlook

2 Construction Industry: At-a-Glance

3 Latest News and Developments

4 Project Analytics

5 Construction Market Data

6 Risk Profile

7 About GlobalData

  • 7.1 Definitions
  • 7.2 CRI Methodology

List of Tables

List of Tables

  • Table 1: Construction Industry Key Data
  • Table 2: Dominican Republic, Top Construction Projects by Value
  • Table 3: Dominican Republic, Construction Output Value (Real, US$ Million)
  • Table 4: Dominican Republic, Construction Output Value (Nominal, DOP Billion)
  • Table 5: GlobalData Construction Market Definitions
  • Table 6: Risk Dimensions
  • Table 7: Ratings, Scores and Definitions

List of Figures

List of Figures

  • Figure 1: Dominican Republic, Construction Output Value (Real, US$ Million, 2017 Prices and Exchange Rate), 2016-2025
  • Figure 2: Dominican Republic, Construction Output Value, by Sector (Real, US$ Million), 2016-2025
  • Figure 3: South and Central America, Construction Output (Real % Change), 2020 and 2021
  • Figure 4: Dominican Republic, Construction Projects Pipeline by Sector (US$ Million)
  • Figure 5: Dominican Republic, Construction Value Add (% Change YoY, at Constant Prices)
  • Figure 6: Dominican Republic, Real Estate and Rental Activities Value Add (at Constant Prices)
  • Figure 7: Dominican Republic, Index of Direct Costs of Home Construction (2010=100)
  • Figure 8: Dominican Republic, Construction Projects Pipeline, Value by Stage (US$ Million)
  • Figure 9: Dominican Republic, Risk Summary
  • Figure 10: Dominican Republic, Risk Regional Comparison