South America is predicted to see 2.1% to 2.7% GDP growth in the 3rd Q of 2026
The # 1 question for the South American construction sectors is how long will the Iran conflict last, and will it drive up inflation in the next 3 to 6 months?
The 12 countries that constitute South America will have a combined construction market of $220 to $280 billion in 2026. Many South American countries have received Government funding / stimulus grants related to new infrastructure projects in the last 12 to 18 months. South America’s construction sector remains somewhat stable and will experience minimal growth as we move further 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.
South American inflation was gradually moderating prior to the 02/28/2026 start of the 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.
Venezuela has reappeared as a major global supplier of oil and gas. In the next 6 to 12 months, Venezuela has the potential of producing 2.5 or more million barrels of oil per day.
Brazil continues to be economically the # 1 country in South America. Other countries like Argentina, Uruguay, Colombia and Chile are set to see an increase in construction activity in the 2nd half of 2026. Brazil’s construction market is forecast to grow by 3.2% to 3.7% in the 2nd half 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, hydro-electricity / energy & aircraft production. The Brazilian construction sector is estimated to be a $130 to $180 billion market in 2026.
Chile & Colombia are both experiencing reasonably high inflation rates as we move further into 2026 and unfortunately this will impact construction costs and future construction activity. A possible conflict with the US is possible, with the US navy destroying a number of so called “drug” vessels in the last month or two.
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.
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 countries.
