Summary

The Chilean construction industry suffered a downturn in 2017, contracting by 2.4% in real terms that year, after registering annual growth of 2.8% in 2016 and 4.1% in 2015. The decline in the industry’s output value in 2017, compared to that of 2016 was due to low public and private sector investments in construction and a downturn in mining due to operational disruptions.

The industry is expected to recover in 2018, supported by a gradual recovery in regional economic conditions, copper production and improving consumer and investor confidence. This growth is expected to continue throughout the forecast period (2018-2022), supported by the government’s ongoing efforts to develop the infrastructure, industrial and healthcare sectors. Under the Tiempos Mejores para Chile program, the government plans to invest CLP9.1 trillion (US$14.0 billion) to develop the country’s overall infrastructure, in a bid to support economic activity by 2022. Moreover, an increase in the number of building construction permits issued is expected to support new construction activity over the forecast period.

The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 3.26% over the forecast period, compared to 0.66% during the review period (2013-2017).

GlobalData’s "Construction in Chile - Key Trends and Opportunities to 2022", report provides detailed market analysis, information and insights into the Chilean construction industry, including -
- The Chilean 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 Chilean construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

- GlobalData expects the Infrastructure construction market to register a forecast-period CAGR of 5.87% in nominal terms, driven by the government’s effort to upgrade the country’s rail, road, airport and port infrastructure. In order to address the country’s infrastructure deficit, the government plans to invest CLP20.7 trillion (US$30.0 billion) during 2018-2026 under the Invierte Chile (Invest Chile) program.
- Forecast period growth in the residential construction market will be driven by the public and private sector investments in the construction of new residential buildings to meet the housing demand. In October 2018, the government announced an investment plan for the development of Tarapacá region. Under the plan, the government seeks to construct 7,610 new housing units and provide subsidies to improve 10,000 existing houses in the region.
- GlobalData expects the energy and utilities construction market to record a forecast-period CAGR of 6.45% in nominal terms driven by the government's focus on developing renewable energy in the country. The government aims to generate 60% of the country’s total electricity requirement through renewable sources by 2035, and 70% by 2050. Consequently, the energy sector will attract public and private sector investments to meet this target.
- Forecast period growth in the industrial construction market will be driven by improvement in investments in industrial and manufacturing activities, as well as improvements in domestic economic conditions and copper production. Moreover, an increase in the total value of the country’s exports is expected to support construction activity in the market over the forecast period.
- The total construction project pipeline in Chile - as tracked by GlobalData and including all mega projects with a value above US$25 million - stands at CLP106.0 trillion (US$163.4 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards early-stage projects, with 59.9% of the pipeline value being in projects in the pre-planning and planning stages as of November 2018.

Scope

- This report provides a comprehensive analysis of the construction industry in Chile.
- Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Chile, 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.