Boston, MA -- (SBWire) -- 08/09/2013 --The Colombian construction industry registered a CAGR of 6.85% during the review period. This growth was fuelled by significant levels of foreign investment in areas such as mining and energy, offices and retail, and improvements in security, as well as business-friendly policies set out by the country. The industry is expected to grow at a CAGR of 7.39% over the forecast period, backed by substantial investments in physical infrastructure such as roads and social infrastructure such as education and healthcare to enhance economic development. In 2012, the government introduced several amendments to its tax code to promote low-cost social housing for low-income demographics. The move is expected to stimulate growth in the residential construction market.
Key Highlights
- Colombia, the fourth-largest economy in Latin America, saw its real GDP grow by 4.0% in 2012, well below the 6.6% recorded in 2011. Growth in investments plummeted from a robust 18.7% (contributing 4.5pps to the overall growth) in 2011, to just 6.0% (contributing 1.6pps) in 2012. Consumer spending, the main economic driver contributing 2.8pps in 2012, slackened from 5.9% in 2011 to 4.3% during 2012.
- Based on Timetric's current forecast, Colombia's GDP is expected to grow by 4.2% and 4.8% in 2013 and 2014 respectively, aided by a revival of private consumption and investment due to monetary stimuli by the Central Bank. Timetric expects the economy to expand at a CAGR of 5.1% over 2015-2017, led by robust domestic demand and enhanced exports due to economic recovery in the US, Colombia's key trading partner.
- The Colombian construction industry posted a solid performance in 2012, growing by 8.1%, while the construction value add grew by 9.1% and accounted for 7.3% of GDP in 2012. During this period, the value add of buildings recorded a year-on-year increase of 7.6%, while the value add of infrastructure works increased by 9.9%.
- Colombia's robust economic growth in the 2000s and strong export-oriented industrial base have significantly increased the need for robust infrastructure networks, with infrastructure deficiencies now one of the key barriers to the country's continued economic growth. Although, as a percentage of GDP, Colombia's investment in infrastructure rose from 0.66% in 2002 to 1.73% in 2010, with 65% of this funding coming from public sources, the country's infrastructure development is still failing to address national challenges. To speed up the pace of infrastructure development, the government has realized the importance of collaboration with the private sector, and introduced reforms in PPP law aimed at increasing the efficiency of project finance mechanisms.
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Companies Mentioned in this Report: Conconcreto SA, Montecz SA, Tipiel SA, AR Construcciones SAS, Conalvias SA
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Construction in Colombia - Key Trends and Opportunities to 2017 - New Report Available
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