Brazil Infrastructure Report Q4 2012

Published : August 2012
No. of Pages : 90

Price:

BMI View: We have downgraded our near-term growth outlook for Brazil''s construction industry as
long-held concerns over procurement play out on investment. High costs and difficulties procuring
projects are weighing on real growth rates, and we have revised down our 2012 growth figure from 6.2%
to 4.2%. Going forward, we expect growth to peak in 2013 and 2014 as investment is pushed through
ahead of the World Cup and presidential election.
Our long-held concerns over Brazil''s construction sector are playing out on growth rates and investment
levels. Despite a huge investment plan backed by the government, growth is disappointing, with Q112
real growth coming in at just 3.3%. As a result, and given the persistence of our concerns over the market,
we have revised down our 2012 growth outlook from 6.2% to 4.2%. Despite this revision, we believe our
medium-term trend for growth to accelerate is still in place. Growth should still peak in 2013 and 2014,
although these figures have also been revised down by around one percentage point to 7% and 6.3%,
respectively.
Inflation and Rising Costs
An increasing number of companies active in Brazil''s construction sector have cited rising costs as a
difficulty when doing business there. High costs, ranging from the price of hotel rooms to the wages of
trained engineers, are hitting profit margins and bottom lines. A shortage of engineers especially is hitting
heavy industries, with the pain felt across mining, oil & gas, power and transport. In addition, the cost of
materials, equipment and services has also been rising, albeit by a lesser degree.
This trend has played out on the profit margins of Brazilian homebuilders and building material
providers. We also anticipate it will have hit the bottom lines of the country''s largest construction and
engineering companies, most of which are private. This trend is evidenced in the data emerging from the
sector; whilst our nominal forecast for the country''s construction industry value remains much the same
BRL226bn, our real growth outlook has been revised down, due to higher-than-anticipated industry
inflation.
Institutions and Bureaucracy
We have long held concerns over the Brazilian government''s ability to filter its vast spending plan
through to projects on the ground. Whilst the upper levels of government are committed to improving the
country''s infrastructure through the BRL959bn PAC II, convoluted and inefficient institutions at all levels
of government have delayed investment. Given the importance of the PAC II to President Dilma
Rousseff, who is referred to as the ''mother of the PAC'', we believe that projects will be pushed through
with greater urgency closer to the 2014 election. This will accelerate growth in 2013 and 2014 and is the
primary reason we believe growth will peak in these years, at 7% and 6.3% respectively.

BMI Industry View 5
Brazil Infrastructure SWOT 7
Market Overview 9
Table: EQS Data 11
Special Focus: Brazil’s Growth Acceleration Plans (PAC I & II) . 12
Building Materials 15
Cement Forecasts . 23
Table: Cement Production and Consumption Data, 2010 - 2016 23
Table: Cement Production and Consumption Data, 2015 - 2021 23
Table: Brazil Construction And Infrastructure Industry Data, 2009 - 2016 24
Table: Brazil Construction And Infrastructure Industry Data, 2014 - 2021 25
Transport Infrastructure 30
Table: Brazil Transport Infrastructure Industry Data, 2009 - 2016 30
Table: Brazil Transport Infrastructure Industry Data, 2014 - 2021 32
Transport Infrastructure Outlook and Overview 34
Table: Brazil Airport Auctions 36
Table: Major Projects -- Transport 37
Energy and Utilities Infrastructure . 46
Table: Brazil Energy and Utilities Infrastructure Industry Data, 2009 - 2016 46
Table: Brazil Energy and Utilities Infrastructure Long Term Forecasts, 2014 - 2021 47
Energy and Utilities Infrastructure Outlook and Overview . 49
Table: Major Projects – Energy And Utilities. 51
Residential/Non-Residential Construction and Social Infrastructure . 57
Table: Brazil Residential and Non-residential Building Industry Data, 2009 - 2016 . 57
Table: Brazil Residential and Non-residential Building Long Term Forecasts, 2014 - 2021 57
Residential/Non-Residential Building Outlook and Overview 58
Table: Major Projects – Construction And Social Infrastructure 62
Risk/Reward Ratings 63
Brazil Risk/Reward Ratings . 63
Rewards . 63
Risks . 63
Table: Latin America Infrastructure Risk/Reward Ratings . 70
Company Monitor . 71
Grupo Camargo Corrêa . 71
Odebrecht 74
Centrais Eletricas Brasileiras SA (Eletrobrás) 77
Global Overview 80
Table: BMI Infrastructure Index - YTD Top Performers (%) 83
Table: BMI Infrastructure Index - YTD Worst Performers (%) 83
Methodology . 84
Construction Industry 85
Data Methodology 85
New Infrastructure Data Sub-sectors 85
Brazil Infrastructure Report Q4 2012
© Business Monitor International Ltd Page 4
Construction 86
Capital Investment 87
Construction Sector Employment 88
Table: Infrastructure Business Environment Indicators 89Table: EQS Data
Table: Cement Production and Consumption Data
Table: Cement Production and Consumption Data
Table: Brazil Construction And Infrastructure Industry Data
Table: Brazil Construction And Infrastructure Industry Data
Table: Brazil Transport Infrastructure Industry Data
Table: Brazil Transport Infrastructure Industry Data
Table: Brazil Airport Auctions
Table: Major Projects Transport
Table: Brazil Energy and Utilities Infrastructure Industry Data
Table: Brazil Energy and Utilities Infrastructure Long Term Forecasts
Table: Major Projects – Energy And Utilities
Table: Brazil Residential and Nonresidential Building Industry Data
Table: Brazil Residential and Nonresidential Building Long Term Forecasts
Table: Major Projects – Construction And Social Infrastructure
Table: Latin America Infrastructure Risk/Reward Ratings
Table: BMI Infrastructure Index YTD Top Performers (%)
Table: BMI Infrastructure Index YTD Worst Performers (%)
Table: Infrastructure Business Environment Indicators

Brazil Infrastructure Report Q4 2012

Published By: Business Monitor International

Price:

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