Market Trends of south america ready mix concrete Industry
Growing foreign direct investments (FDIs) in the region to aid the market demand in the coming years
- In 2022, the commercial sector in South America saw a significant decline of 16.2% in new floor area construction, largely driven by a 9.16% drop in Argentina. However, the sector was poised for a rebound in 2023, with a projected 4.75% increase in volume output. This growth can be attributed to economic growth and a surge in commercial construction, as various industries in the region attracted foreign direct investments (FDI) in 2022. In 2022, the Economic Commission for Latin America and the Caribbean (ECLAC) reported a robust 55.2% rise in FDI in the region.
- The construction volume in the sector witnessed a notable growth of 15.9% in 2020 and a further 3.29% in 2021. This growth was a result of South American governments prioritizing the infrastructure and construction sectors. They eased restrictions, allowing construction, maintenance, and project development activities in private and public ventures. This move aimed to meet crucial milestones, deadlines, and economic recovery goals.
- The commercial sector in South America is projected to witness robust growth in new floor area construction, registering a CAGR of 4% in volume during the forecast period (2023 to 2030). The region is witnessing a notable shift in its commercial construction landscape. Notable projects like the Paulinia Data Center and Porto Alegre Data Center I, initiated in 2023, are among the largest in the region. Additionally, investors are eyeing office buildings, shopping centers, and logistic parks in Brazil, which are expected to fuel market demand in the coming years.
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Affordable housing schemes and subsidies in South America to influence higher construction in the residential sector
- In 2022, the residential sector in South America witnessed a 3.35% surge in new floor area construction compared to the previous year. However, Argentina saw a notable decline of 9.16% in this metric. In 2023, the sector was projected to maintain its growth trajectory, with a construction volume expected to be 3.3% higher than in 2022. This growth can be attributed to factors like increasing urbanization, rising per capita income, and overall economic expansion, all of which are fueling the demand for housing.
- Amidst the backdrop of the COVID-19 pandemic in 2020, South America saw a significant uptick of 11.83% in new floor area construction compared to the previous year. This was a deliberate move by the South American government, which prioritized the construction sector to mitigate the economic downturn and support workers, given the sharp decline in household incomes. Consequently, restrictions on construction activities, including quarantines, were eased.
- Several South American nations are rolling out initiatives to make housing more affordable for their growing populations. For example, in February 2023, Brazil relaunched its nationwide federal housing program, targeting low-income individuals. In October 2023, the World Bank approved a USD 100 million financing package for Ecuador, specifically aimed at bolstering affordable and resilient housing. Bolivia's efforts to ramp up the supply of low-cost housing and maintain reasonable prices are poised to further stoke the demand for residential spaces. As a result, the residential sector in South America is projected to witness a CAGR volume of 4.09% during the forecast period (2023-2030).
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Rising investment on industrialization and sustainable developments in South America, coupled with private sector participation, to propel the growth of industrial construction
- Upcoming infrastructure projects in Argentina and Brazil to create upswings in the region's infrastructure sector over the assessment period
