SOUTH AMERICA (South America is predicted to see 2.1% GDP growth for the rest of 2019):

The last two years have been challenging economically for most South American countries. There are a few encouraging indications, however there are quite a few challenges facing this region. Forecasting the South American construction sector is a difficult activity, bearing in mind that there are more than 10 divergent countries that all have different construction practices & economic goals. The construction market forecast for each of these countries ebbs & flows on the policies of each Government’s economic policies or social needs. Much of the future construction growth in South America will be enhanced by the improving economies & increased government spending on public facilities & infrastructure projects.

The South American Construction / Infrastructure / Commercial Construction markets will experience moderate growth for the remainder of 2019. Commercial & office related type construction is active throughout South America. Shopping mall(s), apartments, warehouses, water supply / disposal, office developments, housing & light manufacturing facilities have & will continue to be built in major & mid-sized cities in Argentina, Chile, Central America (Panama, El Salvador, Guatemala & Nicaragua) & Colombia. Look for this trend to continue in 2019 & beyond.

President Jair Bolsonaro is Brazil’s newly elected President. The construction industry is expected to remain restrained with trending towards a small advance for the balance of 2019. 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 & 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 & a continuing business downturn. Brazil is currently experiencing a small uptick in its’ construction sector. Unemployment in 2019 in the Brazilian construction sector is 13% to 17% which is historically very high for Brazil, look for this rate to improve in 2019. Overall industry unemployment is slightly less, ranging between 11.4% & 11.9% – still historically high.

The change in leadership mentioned above will not put a quick fix of Brazil’s economy & construction sector. Brazil’s GDP is forecast to grow in the 0.6% to 0.9% range for the balance of 2019. Inflation in Brazil is projected to be in the 4.8% to 5.3% for the remainder of 2019, a big improvement from a year ago. It would appear that Brazil is set for modest improvement in 2019 & beyond.

Argentina is experiencing a currency drop that indicates the country is heading into a recession & possible political turmoil going into 2019. Economic activity has fallen in the last six months, high interest rates, & a drop in consumer confidence. These issues & rising inflation has put a damper on new construction projects.

The United Nations estimates that 4 million citizens have left Venezuelans as the counties economic situation worsens. In May, Venezuela’s government & the opposition met for talks in the Norwegian capital, Oslo. The meeting ended without an agreement.

The Venezuela economic / construction state of affairs becomes more & more tenuous as we move further into 2019 – the question is how long can this continue without an uprising? South America’s construction sectors will continue to experience restrained demand for EPC services. Argentina & Venezuela will continue to find 2019 to be a challenging year; they are both in recession. The other major countries, i.e. Brazil, Bolivia, Colombia, Chile, Ecuador, Paraguay, Peru & the Central American nations will all see positive / restrained GDP growth for the balance of 2019, ranging between 1.5% to 2.3%, good but not that great. The recent expansion of the Panama Canal will be a big plus for Central American economies & their construction sectors.

2019 Global Construction Costs Yearbook

Compass International's 500+ page publication provides “current” detailed information on construction cost specific to 101 countries worldwide.

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