Construction in Chile – Key Trends and Opportunities to 2023

2019-11-04
Price :
Published : Nov-2019
No. of Pages : 46

Construction in Chile – Key Trends and Opportunities to 2023

Summary

The Chilean construction industry recovered in 2018, with output value expanding by 3.2% in real terms, compared to -3.2% in 2017; this growth was supported by higher consumer spending, coupled with recovery in copper prices and global commodity demand, which in turn increased the government’s ability to spend within the country’s infrastructure. In addition, in 2018, foreign direct investment (FDI) in the country increased by 206%, due to the government’s introduction of a new FDI policy. Growth during the review period (2014-2018) averaged 1.2% a year, and was supported by public and private sector investment in energy and utilities, infrastructure and residential construction projects, leading to an increase in demand for the Chilean construction industry.

The industry’s output value is expected to continue to expand over the forecast period (2019-2023), due to increasing investments in transport infrastructure, energy, commercial and industrial projects, as well as improvement in consumer and investor confidence. The government plans to invest CLP9.3 trillion (US$14 billion) to develop the country’s roads, railways, hospitals and other social infrastructure during the period of 2019-2023. According to Cámara Chilena de la Construcción (the Chilean Chamber of Construction – CChC), the total investment in construction grew by 2.7% in 2018; this was preceded by annual contractions of 4.6% in 2017 and 0.7% in 2016.

The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 4.07% over the forecast period.

Key Highlights

– GlobalData expects the infrastructure construction market to increase by an annual average of 7.52% over the forecast period, driven by the government’s focus on the development of airport infrastructure in the wake of rising freight and passengers at airports. In June 2019, the government announced a plan to invest CLP927.7 billion (US$1.4 billion) to increase the capacity of airports across the country. Through this, the government aims to modernize 17 airports of the country with an aim to increase the area of national airports from 214,000m2 in 2019 to 537,000m2 by 2039.

– Forecast-period growth in the residential construction market will be driven by the government’s efforts to reduce the country’s housing deficit. In 2018, the government announced plans to build 5,664 housing units in the Ñuble region during the period of 2018-2021. Moreover, in August 2019, the government announced plans to spend CLP200 billion (US$301.8 million) to provide subsidies to low- and middle-income citizens, with an aim to build 3,174 housing units across the country.

– GlobalData expects the energy and utilities construction market to record a forecast-period CAGR of 7.36% in 2023, driven by the development of power grids in the country. The government plans to invest CLP1.3 trillion (US$1.8 billion) to build the Huelquén-Kimal project by 2028. Furthermore, the government plans to build an interconnection network between Peru, Ecuador and Colombia to meet the country rising electricity demand by 2021.

– The government’s focus to develop the country’s healthcare system is expected to drive the market growth over the forecast period. In the 2019 budget, the government increased its total expenditure on the healthcare sector by 5.9%, going from CLP8.2 trillion (US$12.8 billion) in 2018 to CLP8.7 trillion (US$13.1 billion) in 2019. In addition, under the National Health Investment Plan, the government plans to strengthen the public health network with an investment of CLP6.9 trillion (US$10.0 billion) during the period of 2018-2022.

– The total construction project pipeline in Chile – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at CLP86.9 trillion (US$135.8 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards early-stage projects, with 62.9% of the pipeline value being in projects in the pre-planning and planning stages as of November 2019.

GlobalData’s Construction in Chile – Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Chilean construction industry, including –
– The Chilean construction industry’s growth prospects by market, project type and construction activity
– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Chilean construction industry
– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Chile. It provides –
– Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Chile, featuring details of key growth drivers.
– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
– Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

– Identify and evaluate market opportunities using GlobalData’s standardized valuation and forecasting methodologies.
– Assess market growth potential at a micro-level with over 600 time-series data forecasts.
– Understand the latest industry and market trends.
– Formulate and validate strategy using GlobalData’s critical and actionable insight.
– Assess business risks, including cost, regulatory and competitive pressures.
– Evaluate competitive risk and success factors.

Filed in: Manufacturing
Publisher : GlobalData
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