SOUTH AMERICA (South America is predicted to see minimal GDP growth in the 1st of 2023):
The continuing increase in inflation/escalation that impacts food, energy, and commodities prices is a huge challenge to the Brazilian economy and construction sector. Brazil is experiencing political issues that could negate the recent general election. Inflation/escalation inflation in Brazil is running close to 7.5%, which, of course, impacts construction costs.
Argentina is experiencing an inflation rate of between 70% and 90% and reports from Venezuela that inflation is more than 100%. Brazil’s inflation was 6.5% in December, and Chile and Colombia are experiencing higher inflation as we move into 2023. Unfortunately, this will impact construction costs and future construction activity.
Argentina winning the World Cup could be the shot in the arm that Argentina’s economy needs to back on track from more than 5 years of lackluster performance.
Inflation-related energy, oil, and food costs are impacting economic and construction growth across all 12 South American countries.
The smaller nations of South/Central America and the Caribbean, such as Bolivia, Peru, Paraguay, Ecuador, Panama, Dominican Republic, and Jamaica, are challenged by inflation and rising costs of construction-related materials.
It appears that the 1st Q of 2023 will be a challenging period for the 12 South American countries and the South American construction industry. Colombia’s escalation rate is between 11% and 13%, Chile is currently experiencing between 12.5% and 13.5%, and Peru is seeing an 8.5% escalation. Ecuador is more than 12.5%; not a good situation.
Construction-related bulk materials and equipment such as copper (wire/pipe), structural steel, rebar, piping (PVC, CS, and SS), lumber/ plywood, windows, doors, and instrumentation devices are rising once again in the last couple of weeks together with related material shortages.