Boston, MA -- (SBWIRE) -- 01/10/2013 -- BMI View: The government of President Santos continues to prioritise investment into the country's construction sector. Coupled with structural changes to the sector and sound economic policy making, we forecast strong real growth forecast of 5.6% for 2013. This bullish outlook is supported by: the free-trade agreement signed by Colombia and the United States on May 15 2012; continuing expansion in the resource extracting sector; the 10-year US$55bn transport infrastructure budget; the creation of a national infrastructure agency; and the passing of a public-private partnership law to facilitate procurement and propel infrastructure growth. That said, we also continue to highlight persistent risks, such as security, that could put a dent in Colombia's upward trend.

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Key trends and developments in Colombia's infrastructure industry:

?? Continued strong backing from the Colombian government underpins our forecasted annual average real construction growth of 4.4% between 2013 and 2017. ?? The infrastructure industry holds significant potential for investors, with real growth of 7.4% forecast for 2013. The residential and non-residential sector will see real growth of just below 4.0% - a healthy recovery from the 4.9% decline seen in 2010. ?? Strong economic growth - with real GDP growth of 4.4% forecast for 2013 - and expansion in coal, mining, oil and gas extraction, coupled with the recently signed US free trade agreement are creating significant demand for new capacity and better quality infrastructure. Better access to ports and adequate highways will be essential if the country is to meet the expected increase in exports. ?? On the back of some significant strikes against Colombia's Revolutionary Armed Forces of Colombia (FARC), and now historic peace talks between the Colombian government and representatives of the FARC, we see a cautious positive security turnaround that could open up vast areas for legitimate investment, and thus spur opportunities within the construction sector. However, our optimism is cautions; although the government has partly quelled left wing guerrilla insurgencies so that insecurity no longer represents a systematic threat to the state, therefore promoting investment, the risk of violence still persists.

We highlight that corruption remains a risk factor:

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