Construction activity in Brazil was weak during the review period (2013-2017), due to economic slowdown, low oil prices and rising inflation. Moreover, factors such as austerity measures adopted by the government to reduce the budget deficit and corruption allegations against politicians in the Petrobras case or "Operation Car Wash" further exacerbated the macroeconomic conditions and had an adverse impact on the construction industry.
The country's construction industry is expected to contract further in real terms, by 1.5% in 2018, before returning to growth in 2019. Over the remaining part of the forecast period (2018-2022), the industry is expected to be supported by the government's efforts to revitalize the economy, and subsequent improvements in investor and consumer confidence. Furthermore, the rebound in oil prices is expected to improve the government's ability to invest in large infrastructure construction projects over the forecast period.
In 2017, the government launched an infrastructure concessions program with an aim to develop the country's port, road, railway, power transmission lines and sanitation infrastructure. Under this plan, the government aims to invest BRL45.0 billion (US$14.1 billion) through the public-private partnership (PPP) model. Furthermore, government programs such as Minha Casa Minha Vida (MCMV), Plano Decenal de Expansao de Energia 2026 and the National Education Plan 2014-2024 are expected to support industry growth over the forecast period.
Despite these government programs, the Petrobras corruption scandal, in which several politicians and large construction companies are facing allegations, is expected to pose a threat to investor confidence, which will in turn have an adverse impact on investments in construction projects in the years to come.
GlobalData's "Construction in Brazil - Key Trends and Opportunities to 2022", report provides detailed market analysis, information and insights into the Brazilian construction industry, including -
- The Brazilian 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 the Brazilian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
- GlobalData expects the residential market to record a forecast-period CAGR of 3.68% in nominal terms driven by government plans to meet the demand for affordable housing in the country. The government is seeking to build 717,000 new residential units in Sao Paulo by 2030, and plans to build 240,000 affordable housing units for low- and middle-income families by 2030. The residential market growth will also be supported by growing population and urbanization, and positive developments in regional economic conditions.
- The Brazilian energy and utilities construction market's growth will be supported by the government's focus on renewable energy infrastructure. The government aims to generate 48.0% of the total energy from non-hydro renewable sources by 2026. Accordingly, the government plans to increase the country's total installed capacity of wind energy from 13.0GW in 2017 to 28.4GW by 2026.
- GlobalData expects the infrastructure construction market to retain its second-largest position in the industry over the forecast period supported by the government plans to develop the country's transport infrastructure. In July 2018, the government awarded a contract to the Estrada do Feijao Bahia consortium worth BRL700.0 million (US$185.8 million) to build and maintain the BA-052 road by 2038.
- The government is focusing on the installation of 4G technology in major cities, with plans to install high speed fiber optic cables in 70.0% of the country's municipalities by 2020. Furthermore, the government allocated BRL15.0 billion (US$4.5 billion) for providing an internet connection speed of up to 78.0Mbps to 128,000 schools and to connect 92.0% of small cities through broadband connection by the end of 2019.
- The total construction project pipeline in Brazil - as tracked by GlobalData and including all mega projects with a value above US$25 million - stands at BRL1.9 trillion (US$608.5 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards early-stage projects, with 57.8% of the pipeline value being in the pre-planning and planning stages as of November 2018.
- This report provides a comprehensive analysis of the construction industry in Brazil.
- Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Brazil, 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.
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