Construction in Chile – Key Trends and Opportunities to 2015

Document Sample
Construction in Chile – Key Trends and Opportunities to 2015 Powered By Docstoc
					Construction in Chile – Key
Trends and Opportunities to 2015
Reference code: CN1007IR

Published: July-2012


1      Executive Summary

        Prior to the emergence of the global financial crisis in 2009, the Chilean construction industry recorded
        strong growth. However, weak levels of foreign investment and low domestic demand for construction
        projects meant that the industry, which grew by 29.1% in 2008, registered a decline of 4.7% in 2009. In
        contrast, the immediate need for infrastructure construction created by the earthquake in Chile in
        February 2010, coupled with recovery in the global economy, drove industry growth which recovered in
        2010 and recorded a CAGR of 20.0%.

        During the review period, the commercial construction market in Chile recorded a CAGR of 12.82%,
        largely due to the expansion of office space and retail buildings categories, coupled with government
        efforts to increase tourist inflows. Over the forecast period, the market is anticipated to achieve a CAGR
        of 7.9%. Potential expansion within the retail sector, office construction market and the tourism industry
        will drive the commercial construction market over the forecast period. For example, the Chilean tourism
        industry recorded a rise of 9.2% in the number of foreign tourists, in the first quarter of 2011 compared
        with the same period in 2010.

        The infrastructure construction market in Chile recorded the fastest growth of all the construction markets
        within the industry, registering a CAGR of 16.49% during the review period. Such growth is primarily a
        result of the government’s increased focus on infrastructure and the rise of private participation within the
        market. Furthermore, the market is also anticipated to achieve the fastest growth over the forecast period
        with a CAGR of 8.37%, as a result of further government and private investments towards the
        reconstruction and overall development of the country’s infrastructure.

        The institutional construction market was the smallest market in the Chilean construction industry,
        accounting for 7.7% of the overall industry value in 2010. However,
Description: Chile’s economy is considered one of the most stable in the South American region with less political risk than other nations and a strong legal framework. In 2010, the World Economic Forum (WEF) ranked Chile first in Latin America for its attractiveness as a location for private investment and the Chilean construction market grew by XX.X%, after recording a decline of X.X% in 2009. The decline of the country’s construction market was a result of the global economic slowdown, and Chile’s proximity to the US impacted its construction market significantly. However, owing to Chile’s strong economic policies and government measures such as tax cuts, the lowering of interest rates and increased employment expenditure, the construction industry recovered in 2010. In addition, the government increased capital investment to CLPXX.X billion, the highest in over twenty years, which significantly aided the country’s construction industry. With continued growth anticipated in the residential and infrastructure construction markets, which together comprised XX.X% of the Chilean construction industry in 2010, the overall construction market is anticipated to grow at a CAGR of XX.X% over the forecast period.
PARTNER Timetric
Timetric is an independent economic and business research firm providing critical intelligence on emerging economies and key global industries. We provide detailed economic and sector intelligence, business insights and authoritative, independent commentary. Timetric’s flagship products are economic and industry intelligence centers, which are premium decision tools that provide access to comprehensive research and expert analysis. They provide invaluable decision support presented in easily digestible formats and grounded in deep research. One of the key components of each of these intelligence centers are the hundreds of high quality research reports across countries, industries and companies, which Timetric produces each year. These reports draw on in-depth primary and secondary research, proprietary data and high quality modelling and analysis to give you insight into global market and economic dynamics.