Brazil Infrastructure Report

Providing expert analysis, independent forecasts and competitive intelligence on the Infrastructure industry.

Report includes: BMI Industry View, Industry SWOT Analysis, BMI Industry Forecast, BMI's Infrastructure Risk Reward Index, Market Overview and Company Profiles.

Why you should buy this report

  • Gain independent insight into the outlook for the infrastructure industry through BMI's 10 year forecasts
  • Understand the market through analysis of projects , investment plans and key players
  • Understand the threats to your operations and investments and protect your company against future risks
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Brazil Infrastructure Report
Product Price
$1,295.00

BMI View: The impeachment of former president Dilma Rousseff means Michel Temer will see her term out to 2019, which is unlikely prove enough time for his m ajor structural changes to infrastructure policies to have a great effect , t hough they could be a long-term game-changer. In the near term , uneven growth will be driven by timid economic recovery, limited foreign investment and a semblance of political stability.

Latest Updates And Structural Trends

  • We maintain our construction industry value real growth forecast for 2016, with the industry expected to contract by 3.4%. A 6.2% contraction was reported for Q1 2016, while employment in the sector continues to fall in 2016, down 4.8% y-o-y in Q1, following a 10% fall in 2015. Despite the new administration beginning to make structural changes to infrastructure planning and investment, we maintain our cautious forecast of 1.2% growth in 2017, driven primarily by base effects following three years of recession in the industry.

  • Following the impeachment of former president Dilma Rousseff, some political stability has been gained as President Michel Temer will see out the remainder of her term to 2019. Yet it will take time for infrastructure plans and investment to gain traction, and therefore we are maintaining our forecast over the coming several years at 1.4% on average between 2018 and 2025. Temer has dissolved the Workers' Party's policies which have guided infrastructure investment over the past decade, including the PAC and the transport concessions programme, and is auditing the Minha Casa Minha Vida low income housing programme. With limited detail on what the future plans will look like beyond the high level details of the Investment Partnership Programme (IPP) we are holding our outlook.

  • Addressing constrained domestic capacity and weak international investor sentiment will be crucial for the success of President Temer's new infrastructure plans. It will take several months for new regulations to be worked out and then several more months for tenders to take place, at which point Temer would be nearing the end of his two-year term. As a result, we anticipate limited short-term positive implications from the restructuring - particularly on jobs and growth, while noting that it is necessary in order to support a multi-year recovery in the market.

  • Domestic construction capacity continues to be in a state of flux with a number of high profile arrests having taken place in recent months and the sentencing of Marcelo Odebrecht to 19 years in prison for his role in the scandal. As of late November, 32 companies remain on Petrobras' banned contractor list; however, leniency deals are being agreed, with Camargo Correa and Andrade Gutierrez agreeing to pay fines - indicating some scope for normalisation. This implies limited fundamental changes in the country's competitive landscape. However, we do anticipate a large number of assets will come to market as these companies seek to raise capital in light of limited access to financial markets.

  • Chinese investor interest continues to expand in Brazil and could present one of the most viable sources of capital for infrastructure development. China Three Gorges is now the second largest private power generator in Brazil, following a BRL13.8bn investment into the sector in November. Chinese investors have indicated an interest in the country's transport concessions and electricity distribution infrastructure

Brazil Construction Industry Forecast
2015 2016f 2017f 2018f 2019f 2020f
e/f = BMI estimate/forecast. Source: IBGE, BMI
Construction industry value, BRLbn 325.08 343.22 366.13 393.65 420.39 447.69
Construction Industry Value, Real Growth, % y-o-y -7.63 -3.42 1.18 2.22 1.54 1.50
Construction Industry Value, % of GDP 5.5 5.5 5.5 5.5 5.4 5.3

Risk/Reward Index

  • Brazil's Infrastructure RRI score has stabilised at 43.2 out of 100, falling 5.4 points since the same time in 2015 and more than 10.0 points since March 2014.

  • Brazil scores 35.0 out of 100 for Industry Rewards, reflecting our expectations for the industry to remain in recession in 2016 and post below trend growth over our ten-year forecast. Despite having the largest industry value size in Latin America, the country comes 9th regionally (out of 14 countries) for the segment.

  • Brazil's Country Risks score is 49.9. We have downgraded our outlook for policy continuity following President Rousseff's suspension pending impeachment proceedings. Although President Michel Temer will serve out the remainder of Rousseff's term after her impeachment, we note that investigations remain underway and we expect further allegations will be raised.

Infrastructure Risk Reward Index (Brazil 2016-2016)
Risk/Reward Index Rewards Industry Rewards Country Rewards Risks Industry Risks Country Risks
Source: BMI
Brazil 43.2 42.1 35.0 55.2 45.9 40.0 49.9
BMI Industry View
7
Table: Brazil Construction Industry Forecast
8
Table: Infrastructure Risk/Reward Index (Brazil)
8
SWOT
9
Industry Forecast
11
Construction And Infrastructure Forecast Scenario
11
Latest Updates
11
Table: Brazil 10-Year Construction Industry Forecast
12
Structural Trends
12
Transport Infrastructure - Outlook And Overview
16
Latest Updates
16
Table: Brazil 10-Year Transport Infrastructure Industry Forecast
17
Structural Trends
17
Table: 2015 Transport Concessions Plan - Allocations
18
Table: Transport Projects
23
Energy And Utilities Infrastructure - Outlook And Overview
24
Latest Updates
24
Table: Brazil 10-Year Energy & Utilities Industry Forecast
25
Structural Trends
25
Table: Energy & Utilities Projects
32
Residential/Non-Residential Building - Outlook And Overview
33
Latest Updates
33
Table: Brazil 10 Year Residential & Non-Residential Industry Forecast
34
Structural Trends
34
Table: Construction And Social Infrastructure Key Projects
41
Industry Risk Reward Ratings
42
Brazil - Infrastructure Risk/Reward Index
42
Risk/Reward Index
42
Rewards
42
Risks
43
Latin America Industry Risk/Reward Index
45
Table: Latin America Infrastructure Risk/Reward Index
50
Market Overview
51
Competitive Landscape
51
Table: Key Company Financials
53
Company Profile
55
Odebrecht
55
Table: Odebrecht Financial Data
58
Methodology
60
Industry Forecast Methodology
60
Sector-Specific Methodology
61
Risk/Reward Index Methodology
65
Sector-Specific Methodology
66
Table: Infrastructure Risk/Reward Index Indicators
66
Table: Weighting Of Indicators
67

The Brazil 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 Brazil Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Brazilian infrastructure and construction industry.

Key Benefits

  • Benchmark BMI's independent infrastructure industry forecasts for Brazil to test other views - a key input for successful budgetary and planning in the Brazilian infrastructure market.
  • Target business opportunities and risks in the Brazilian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Brazil.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

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.

Market Overview

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.

Company Profiles*

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.

Sources

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.