BMI View : We maintain our positive outlook for Chile's construction sector in 2016 as oil prices remain low and the country's macroeconomics strengthen. Growth in the industry will be driven primarily by investment in power plants and road infrastructure projects, with both sectors enjoying robust government support and a positive project finance outlook.
Latest Updates And Structural Trends
Chile is benefiting from weak oil prices as the country is a net hydrocarbon importer. Lower energy costs will increase investment in the infrastructure sector in the coming quarters.
A new infrastructure fund is to be approved in H116 and plans to create a concessions agency further support our positive outlook for the construction industry in Chile. Apart from encouraging infrastructure development, this fund has been created with the aim of incentivising economic growth and creating new jobs.
Road infrastructure and renewable energy projects will concentrate most of the investment in Chile's transport and power sectors. Despite the country's challenging geography the attractive business and project finance environment will see strong investor interest in road concessions. In turn, we expect strong growth in renewable energy infrastructure given the country's high potential for biomass, solar, wind, and marine power generation.
We expect growth in the non-residential sector to be driven by investment in hospitals and prison infrastructure. Despite severe delays in the implementation of projects, a robust project pipeline and strong government support will see the expansion of this sector which will, in turn, contribute to boosting construction industry growth in the country.
|e/f = BMI estimate/forecast. Source: BCC, BMI|
|Construction industry value, CLPbn||11,371.91||12,196.83||13,064.72||13,861.72||14,781.74||15,762.51||16,652.04|
|Construction Industry Value, Real Growth, % y-o-y||2.12||3.45||3.92||3.40||3.64||3.57||2.90|
|Construction Industry Value, % of GDP||7.3||7.3||7.3||7.3||7.2||7.2||7.0|
Chile ranks second highest in our Latin America regional RRI, after Colombia. Market-friendly policies and strong institutions have been the hallmark of the Chilean government, setting the benchmark for political stability in the region.
The risks of investing in Chile's infrastructure sector are minor compared to neighbouring countries. As such, the country scores almost double the regional average.
Chile's public-private partnership (PPP) and concession model is one of the most advanced in the region. This is reflected in the country's strong score for Industry Risks in our index.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Chile 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 Chile Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Chilean infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Chile to test other views - a key input for successful budgetary and planning in the Chilean infrastructure market.
- Target business opportunities and risks in the Chilean infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Chile.
- 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.