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.
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 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.
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.
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.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page