BMI View: We forecast an average of 2.1% real growth for the six construction industries of Central America in 2016. T he decline from our forecast for 2015 - 4. 4 % - is mainly due to a steep drop - off in Panama as it concludes expansion of t he Panama Canal and a normalisation of a housing boom in Nicaragua. The region will still off er significant opportunities: the transport sector will see strong growth as development fu nds target regional integration and Panama will recover by 2018 as increased public spending funds a strong project pipeline.
Latest Updates And Structural Trends
El Salvador's construction industry is poised to benefit from an influx of capital from regional development banks and a US aid agency. We have downgraded our forecast for 2015 to a still positive, but muted 1.3%. However, we expect development agency backed projects to pick up steam in 2016 and forecast the construction industry to grow at 4.6% annually from 2016 to 2019.
Honduras is also gaining support from development banks and is set to end its construction industry recession in 2016. Although projects in the country have suffered from delays in the past, our optimism for the industry is supported by a number of high-value projects which have already reached financial close and are set to break ground early in 2016.
We forecast a contraction for the Panama construction industry in 2016 and 2017 of 6.0% and 4.5% respectively on the back of the completion of the canal expansion. However, we expect this recession to be short-lived and opportunities to return en masse as the government boosts spending to support the critical sector.
A boom in residential and commercial building in Nicaragua has caused the construction industry to expand rapidly, with our forecast growth rate of 15.9% for 2015 by far the highest in the region. We expect the industry to slow to 7.4% in 2016, normalising to a 4.1% real growth rate to the end of our 10-year forecast.
After a strong performance in 2015 - 4.0% real growth - Costa Rica's construction industry will slow as project delays and slowing investment drag on construction industry growth. A slowdown will begin in H215 and continue into 2016, for which we forecast 1.1% real growth for the year.
The corruption scandal and subsequent resignation of President Perez Molina of Guatemala will take its toll on the country's construction industry. With political instability and security issues sapping investor confidence, we expect 1.8% real growth in 2016.
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The Central America 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 Central America Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Panamanian, Guatemalan, Nicaraguan, Salvadoran, Costa Rican, Belizean, Honduran infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Panama, Guatemala, Nicaragua, El Salvador, Costa Rica, Belize, Honduras to test other views - a key input for successful budgetary and planning in the Panamanian, Guatemalan, Nicaraguan, Salvadoran, Costa Rican, Belizean, Honduran infrastructure market.
- Target business opportunities and risks in the Panamanian, Guatemalan, Nicaraguan, Salvadoran, Costa Rican, Belizean, Honduran infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Panama, Guatemala, Nicaragua, El Salvador, Costa Rica, Belize, Honduras.
- 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.