Construction in Argentina – Key Trends and Opportunities to 2023

2019-12-18
Price :
Published : Dec-2019
No. of Pages : 45

Construction in Argentina – Key Trends and Opportunities to 2023

Summary

In real terms, the Argentine construction industry suffered a huge setback in 2018, registering a marginal growth of 0.2% that year, following an annual growth of 12.4% in 2017. This was due to falling economic activity, skyrocketing inflation, a high level of interest rates and the austerity measures adopted by the government to reduce the national debt, which in turn reduced public and private sector investments in construction projects.

The industry is expected to contract by 6% in 2019 and 2.4% in 2020, due to the continued deteriorating macroeconomic conditions and the challenging business environment. Many of the construction projects included in the plan that was launched by the outgoing administration in 2019 to raise investments in sectors such as transport, energy and communications were affected by the country’s worsening financial conditions, including the transmission line between Río Diamante to Charlone, the Vaca Muerta gas pipeline and the Norpatagónico (North Patagonia) railway line project.

During the period in 2021-2023, the industry is expected to recover, supported by the government’s efforts to revitalize the economy and subsequent improvements in investor and consumer confidence. Investments in road infrastructure projects, including those such as the Safe Highways and Roads Network program and Corredor C Toll Road development, as well as renewable energy projects through RenovAr plan (Argentina’s Renewable Energy Auction), will support the industry output growth. The ongoing recovery in building permit approvals is also expected to bode well for the industry’s outlook.

The industry’s output value in real terms is expected to post an annual average growth rate of 0.1% over the forecast period (2019-2023).

Key Highlights

– GlobalData expects the residential construction market to retain its leading position over the forecast period and account for 35.9% of the industry’s total value in 2023, supported by the government’s investment on the development of affordable housing under the ProCreAr program. In January 2019, the government delivered 83 homes out of a total 600 housing units in Ituzaingó, followed by the delivery of 70 homes in February 2019, of a total of 717 housing units in Posades. As a part of urban development under the ProCreAr program, the government is developing 70 projects across the country, which involves the construction of 23,000 houses.
– The government’s plans to increase investments in Argentine road infrastructure are expected to support the infrastructure construction market output over the forecast period. Under the Safe Highways and Roads Network program; the government aims to invest a total of ARS172.1 billion (US$6.0 billion) through a public-private partnership (PPP) model to develop road infrastructure in the country by 2022.
– Energy and utilities construction market’s forecast-period output is expected to be supported by the government’s plan to achieve the target of 20% of the electricity production from renewable sources by 2025. To achieve this target, the government is focusing on the development of renewable energy sources through RenovAr plan. As of October 2019 (the latest data available at the time of writing), the construction of 154 renewable projects are underway for a cumulative power of 5GW, with investment of ARS327.4 billion (US$7.5 billion).
– Institutional construction market’s output over the forecast-period is expected to be supported by the ongoing construction work on hospital buildings The construction works on 400 beds and 16 operating rooms for the Central Hospital are underway in San Luis, which involves the investment of ARS7 billion (US$186 million) by 2020. Furthermore, the government aims to begin the construction works of Norpatagónico Hospital with an investment of ARS2.7 billion (US$62 million) in Neuquén by 2020.
– The total construction project pipeline in Argentina – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at ARS2.2 trillion (US$77.3 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively well balanced, with 52.6% of the pipeline value being in projects in the pre-planning and planning stages as of December 2019.

GlobalData’s Construction in Argentina – Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Argentine construction industry, including –
– The Argentine 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 Argentine 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 Argentina. It provides –
– Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Argentina, 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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