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South America

South America Construction Costs

Much of the future growth in South America will be increased by the improving economies and increased government spending on public facilities and infrastructure projects. The South American construction / Infrastructure / Commercial Construction markets will experience moderate growth in 2nd half of 2018, commercial and office related type construction is active throughout South America. Shopping mall(s), apartments, warehouses, water supply / disposal, office developments, housing and light manufacturing facilities have and will continue to be built in major and mid-sized cities in Argentina, Chile, Central America (Panama, El Salvador, Guatemala and Nicaragua) and Colombia, look for this trend to continue in 2018.

The Brazilian Government is planning to invest more than $60 billion in new infrastructure / transportation projects in the next two years.  Brazil one of the (BRICS) Brazil, Russia, India, China and Russia has experienced a terrible decade economically. Construction activity in Brazil has been lackluster over the last three to four years, following significant political turmoil and a continuing business downturn. Brazil is currently experiencing a small uptick in its construction sector, unemployment in the Brazilian construction sector is 11% to 14% which is historically very high for Brazil. The change in leadership will not put a quick fix of Brazil’s economy and construction sector, the recession is expected to continue throughout 2018. GDP is forecast to grow in the 2.6% to 2.9% range in the 2nd half of 2018, much better than a year ago. Inflation in Brazil is projected to be in the 11% to 12% by the end of 2018.

The Venezuela economic situation becomes more and more disastrous as we move into the 2nd half of 2018, the question is how long can this continue? South America’s construction sectors continue to struggle with restrained demand for EPC services. Brazil and Venezuela will continue to find 2018 to be a challenging year; they are both in recession. The other major countries, i.e. Colombia, Chile, Ecuador, Peru and the Central American nations will all see restrained GDP growth in the 2nd half of 2018, ranging between 2.3% to 2.8%. The recent expansion of the Panama Canal will be a big plus for Central American economies and their construction sectors. Argentina is experiencing a slow adjustment to the new elected government’s policies.


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