Market Trends of Brazil Construction Industry
Government Initiatives for Infrastructural Development
In Brazil, the government launched an infrastructure concessions program with an aim to develop the country's port, road, railway, power transmission lines, and sanitation infrastructure. Under this plan, the government aims to invest BRL 45.0 billion (USD 14.1 billion) through the public-private partnership (PPP) model. Furthermore, government programs such as Minha Casa Minha Vida (MCMV), Plano Decenal de Expansao de Energia 2026, and the National Education Plan are expected to support industry growth over the forecast period.
The residential and commercial sectors are expected to accelerate the construction industry during the forecasted period. The future prospects for the construction sector remain bleak in comparison to other segments of the economy. It could become crucial in efforts to boost the economy in the forecasted period, as it is a very labor-intensive segment.
USD 866 million was invested in 762 infrastructure projects in 2022 to upgrade the state of Brazilian tourist cities and maximize the potential of the industry, drawing more tourists and providing them with a more comfortable stay.
The upgrades comprised, among other interventions, the rehabilitation and building of event spaces, public squares, waterfronts, asphalt paving, and vistas. With investments totaling USD 274.7 million, 268 projects in the Northeast alone were finished. With 219 projects, the South area received the second-most enhancements, after only the Southeast with 155.
Increasing Investment Opportunities for the Foreign and Local Investors
The Brazilian government's efforts to mobilize privatization being considered as a means to stimulate economic growth has been a major opportunity, following which it introduced Projeto Crescer (Project Growth).
The Chinese government is also assured to invest in infrastructure, energy, manufacturing, and mining projects. In addition, as a part of the new energy plan PDE 2024, the Ministry of Mines and Energy revised the country's solar energy targets compared to the target planned for 2023. The initial target includes producing 3,500MW of solar power by 2023, while the new target includes generating 7,000MW of solar energy by 2024.
The Brazilian Development Bank (BNDES) has been playing a dominant role in long-term financing in Brazil. The other two big state-owned banks, Caixa Economica Federal and Banco do Brasil, have also increased their market share. For projects located in the northeast of Brazil, other major sources of financing for infrastructure projects are Caixa Economica Federal, Banco do Brasil, Banco do Nordeste, and other government-owned banks.
