Construction in Brazil - Key Trends and Opportunities to 2024

Construction in Brazil - Key Trends and Opportunities to 2024

  • September 2020 •
  • 53 pages •
  • Report ID: 5622498 •
  • Format: PDF
Construction in Brazil - Key Trends and Opportunities to 2024

Summary
The analyst has maintained its forecast of a 6% contraction for Brazil’s construction industry in 2020, and projection of a 2.1% contraction in 2021. While the country continues to struggle to contain infection rates, the impact of the Coronavirus (COVID-19) outbreak on the construction industry has been less severe when compared to other countries in the region, as nearly all building activities have been allowed to carry on since the start of the pandemic. According to the Brazilian Institute of Geography and Statistics (IBGE), the construction industry in Brazil posted a year-on-year (y-o-y) decline of 11.1% in Q2 2020, compared to a y-o-y decline of 1% in the previous quarter, bringing the sector to a level of activity not seen since 2006.

Recent data has shown some signs of a recovery in the industry, due to the continuity of the sector’s activities, record-low interest rates and an increase in access to financing for new homes through initiatives such as Brazilian Savings and Loan System (SBPE), the ’Casa Verde e Amarela’.

Data released by the Brazilian Association of Real Estate Credit and Savings Entities (Abecip) showed that the number of units financed with SBPE resources in the first half of 2020 amounted to 160,700 units - the best performance since 2015 - while the volume loans rose by 28.6% in the first six months of 2020, in comparison to the same period of 2019. At the same time, the indices measuring activity levels and employment continued on a path to recovery, while operating capacity utilization is near pre-pandemic levels.

Nevertheless, currently foresees that construction output in Brazil will not return to 2019 levels until 2023, as heightening political uncertainty, widening fiscal deficits and rising debt burdens in the face of weak growth and doubts over the duration of the pandemic will restrain government efforts to encourage both private and foreign investment, while leaving no space in the budget for investing in public works. Other issues such as high levels of bureaucracy and difficulties that hinder investment and increase the cost of construction in the country are also expected to impact the construction industry outlook.

The costs of materials such as steel and cement have registered significant increases in their prices in recent months, hampering the planning of works and start of new projects. The National Index of Construction Cost - Materials and Equipment, estimated and released by the Getúlio Vargas Foundation (FGV), registered an increase of 1.8% in August, which was the highest since September 2008 (1.9%).

This report provides detailed market analysis, information and insights into Brazil’s construction industry, including -
- Brazil’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 Brazil’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 Brazil.

It provides -
- Historical (2015-2019) and forecast (2020-2024) 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

Reasons to Buy
- Identify and evaluate market opportunities using 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 critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.
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