Construction and Real Estate in Latin America

November 2021

Latin American economies were hard hit by COVID-19, with a sharp decline in construction activities in 2020. While public infrastructure investment is set to facilitate the industry’s recovery over the medium term, prevailing uncertainties, soaring inflation and rising unemployment will limit growth in the construction and real estate industry. Nonetheless, booming global demand for building materials will boost construction costs, supporting the industry’s production value growth.

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Key findings

The construction and real estate market in Latin America to continue struggling

Latin America remains one of the smallest and slowest growing construction and real estate markets globally. Having been hard-hit by the COVID-19 pandemic outbreak, the region is set to continue struggling to regain economic growth and see the expansion of construction and real estate activities. Rising unemployment, macroeconomic uncertainty, political instability and high inflation will continue to hamper the construction industry’s performance.

Brazil’s recession to drag down recovery in construction in the region

Brazil remains the largest construction and real estate market in Latin America, and its contraction will hamper recovery in the region as a whole. The Brazilian construction sector is set to continue facing sluggish demand, given the rising cost of mortgages and high unemployment, coupled with soaring inflation and prevailing economic uncertainty. Moreover, rising property prices, due to global material shortages, and a weakening currency will deter households and businesses from major investment in real estate.

Infrastructure spending to fuel growth over the short-to-medium term

Government investment in infrastructure will play a vital role in the construction and real estate industry’s recovery, following the COVID-19-induced downturn around the globe. Latin American countries are seeking to revitalise their economies by financial injections into infrastructure projects. These investments are projected to support the construction sector over the short-to-medium term, and cushion the impact of sluggish household and business demand.

Rises in construction material prices add to the industry’s value growth

Globally increasing construction material prices, especially for metals and wood products, are projected to add to the Latin American construction and real estate industry’s output value growth over the medium term. Rising production costs and soaring inflation will be reflected in final property prices, enabling the industry to record growth in the context of only a fragile recovery in demand.


Key findings

Production Outlook

Latin American construction sector to remain subdued
Production is not expected to reach pre-pandemic levels by 2030
While Brazil struggles, Colombia and Mexico will gain momentum
Recovery to be driven by infrastructure investment and rising prices
Real estate activities rise in value in major regional economies
Construction dominates growth but real estate activities picking up

Competitive Landscape

The industry remains fragmented
SMEs are gaining ground in key Latin American market s

Country Snapshots

Brazil: Production Context
Mexico: Production Context
Colombia: Production Context
Chile: Production Context
Argentina: Production Context
Peru: Production Context
Dominican Republic: Production Context
Ecuador: Production Context
Panama: Production Context
Uruguay: Production Context
Cuba: Production Context
Costa Rica: Production Context
Puerto Rico: Production Context


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