BMI View: We forecast a return to growth for Argentina's construction industry at 3 % in 2015, partly as a result of low base effects and an investment drive prior to the October presidential elections. Should a more centrist government be elected, we expect a rise in private investment in infrastructure and a diversification of the current competitive landscape , which is largely weighted towards by Chinese and Russian companies.
Key Trends And Developments
Our Country Risk team forecasts Argentina's economy to grow by a moderate 0.1% in 2015, following 0.4% real GDP growth in 2014. Weak gross fixed capital formation (GFCF) will limit the extent of growth in the construction industry.
However, after a new government is inaugurated in 2016, we expect GFCF will return to real expansion. Businesses will begin construction of fixed assets as expectations for more business-friendly policies, such as tax incentives for investment, are implemented. Further, the end of Fernandez's administration will improve perceptions about the Argentine government. Reduced restrictions on imports and a weakened peso will reduce the cost for foreign businesses looking to expand in the country's infrastructure sector.
Consumer price inflation will remain elevated in 2015 on the back of an increase in government spending in advance of the October general elections. Double-digit inflation (forecast at 17.0% in 2015) will erode real purchasing power of consumers and weigh on sentiment, which will be detrimental to the construction of new homes. This is in addition to Argentina's largely dollarised real estate sector, which suffered severely from the scarcity of dollars derived from the government's exchange controls.
Our view is that the Argentine government will negotiate a settlement with investors who have refused restructuring offers on defaulted debt - the so-called 'holdouts' - in advance of October 2015 general election. This forms part of our broader view that...
The Argentina Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Argentina Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Argentinian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Argentina to test other views - a key input for successful budgetary and planning in the Argentinian infrastructure market.
- Target business opportunities and risks in the Argentinian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Argentina.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.