BMI View : Declining global oil prices, high levels of national debt and substantial inflation have all contributed to a very poor outlook for Venezuela's ailing construction sector. Few new projects are coming to the pipeline and existing construction projects are often subject to extensive delays and rising debts as c osts of key supplies increase. Venezuela continues to present an unattractive foreign investment environment, and there is little scope for future growth unless fundamental economic and political reforms are enacted.
We expect the Venezuelan construction industry's recession to continue until 2018 - contracting by 7.6% and 4.5% respectively in 2016 and 2017 - as low oil, a poor business environment, and spiralling costs all continue to weigh heavily on the industry.
A deteriorating fiscal position will limit the Venezuelan government's ability to invest into infrastructure assets while high risks and bleak prospects for profit will deter private, especially foreign, investment.
The nationalisation of Venezuela's key building material industries - cement, steel, etc - will continue to drive up prices and weigh on construction growth as output remains well below capacity.
|f = BMI forecast. Source: Banco Central de Venezuela, BMI|
|Construction Industry Value, Real Growth, % y-o-y||-14.98||-7.63||-4.50||0.26||2.10||6.58||5.56|
|Construction Industry Value, % of GDP||4.5||4.8||4.9||4.9||4.9||5.0||5.1|
|Construction industry value, VEFbn||276.88||518.88||780.91||1,095.27||1,430.46||1,839.30||2,346.26|
Venezuela's Infrastructure Risk/Reward Index score continues to fall, receiving an overall score of only 27.6 out of 100.
The country's score of Industry Rewards has fallen significantly since last year - from 37.5 to 25.0 - as the construction industry's recession deepens.
Venezuela's score for Industry Risks has also fallen to 20.0 from an already low 30.4 last year, reflecting the high risks associated with Latin America's worst business environment.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Venezuela 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 Venezuela Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Venezuelan infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Venezuela to test other views - a key input for successful budgetary and planning in the Venezuelan infrastructure market.
- Target business opportunities and risks in the Venezuelan infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Venezuela.
- 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.