South America is predicted to see 2.1% to 2.6% GDP growth in the 2nd Q of 2026
South American Inflation was gradually moderating prior to the 02/28/2026 - the start of Iran conflict between Iran, Israel & the USA. Future inflation risks and challenges include volatile currencies & a lengthy Iran conflict that could drive energy, steel, aluminum, copper, construction components, wage rates & freight costs significantly higher.
The 12 countries that constitute South America will have a combined construction market of $220 to $280 billion in 2026. Many South America countries have received Government funding / stimulus grants related to a few infrastructure projects in the last 12 months. South America’s construction sector remains somewhat stable and will experience minimal growth as we move into 2026. South America’s construction forecast for 2026 is reasonably positive, with unbalanced growth in some countries, propelled by infrastructure roads, bridges and energy related facilities and new AI related data centers.
Brazil continues to be economically the number 1 country in South America, while other countries like Argentina, Uruguay, Colombia and Chile are set to see an increase in construction activity in 2026. Brazil’s construction market is forecast to grow by 3.2% to 3.7% in the 2nd Q of 2026. Brazil’s left leaning President is said to be wary of the US Trump administration. Brazil continues to develop its bounteous offshore O&G, timber, crops, ethanol, hydroelectricity / energy & aircraft production. Brazil is Latin America’s largest economy; it is a member of BRIC’s it will be interesting to see the reaction of Brazil’s left leaning Government with the US right leaning President. The Brazilian construction sector is estimated to be a $130 to $180 billion market in 2026.
Argentina is experiencing a major improvement to the construction inflation rate, which is now in the 20% and 35% range, this improvement is the result of a newly elected Government.
Construction related bulk materials and equipment such as copper (wire / pipe), structural steel, rebar, piping (PVC, CS & SS), lumber / plywood, windows, doors and instrumentation devices are starting to moderate in most counties.
The smaller nations of South / Central America and Caribbean, such as Bolivia, Peru, Paraguay, Ecuador, Panama, Dominican Republic and Jamaica are challenged by high unemployment levels, inflation and rising costs of construction related materials.
The number 1 issue for South America’s construction sectors is: How long will the Iran conflict last and will it drive up inflation in the next 3 to 6 months?
