Construction in Chile – Key Trends and Opportunities to 2023

The Chilean construction industry recovered in 2018, with output value expanding by 3.2% in real terms, compared to -3.2% in 2017; this growth was supported by higher consumer spending, coupled with recovery in copper prices and global commodity demand, which in turn increased the government’s ability to spend within the country’s infrastructure. In addition, in 2018, foreign direct investment (FDI) in the country increased by 206%, due to the government’s introduction of a new FDI policy. Growth during the review period (2014-2018) averaged 1.2% a year, and was supported by public and private sector investment in energy and utilities, infrastructure and residential construction projects, leading to an increase in demand for the Chilean construction industry.

The industry’s output value is expected to continue to expand over the forecast period (2019-2023), due to increasing investments in transport infrastructure, energy, commercial and industrial projects, as well as improvement in consumer and investor confidence. The government plans to invest CLP9.3 trillion (US$14 billion) to develop the country’s roads, railways, hospitals and other social infrastructure during the period of 2019-2023. According to Cámara Chilena de la Construcción (the Chilean Chamber of Construction – CChC), the total investment in construction grew by 2.7% in 2018; this was preceded by annual contractions of 4.6% in 2017 and 0.7% in 2016.

The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 4.07% over the forecast period.

Key Highlights

– GlobalData expects the infrastructure construction market to increase by an annual average of 7.52% over the forecast period, driven by the government’s focus on the development of airport infrastructure in the wake of rising freight and passengers at airports. In June 2019, the government announced a plan to invest CLP927.7 billion (US$1.4 billion) to increase the capacity of airports across the country. Through this, the government aims to modernize 17 airports of the country with an aim to increase the area of national airports from 214,000m2 in 2019 to 537,000m2 by 2039.

– Forecast-period growth in the residential construction market will be driven by the government’s efforts to reduce the country’s housing deficit. In 2018, the government announced plans to build 5,664 housing units in the Ñuble region during the period of 2018-2021. Moreover, in August 2019, the government announced plans to spend CLP200 billion (US$301.8 million) to provide subsidies to low- and middle-income citizens, with an aim to build 3,174 housing units across the country.

– GlobalData expects the energy and utilities construction market to record a forecast-period CAGR of 7.36% in 2023, driven by the development of power grids in the country. The government plans to invest CLP1.3 trillion (US$1.8 billion) to build the Huelquén-Kimal project by 2028. Furthermore, the government plans to build an interconnection network between Peru, Ecuador and Colombia to meet the country rising electricity demand by 2021.

– The government’s focus to develop the country’s healthcare system is expected to drive the market growth over the forecast period. In the 2019 budget, the government increased its total expenditure on the healthcare sector by 5.9%, going from CLP8.2 trillion (US$12.8 billion) in 2018 to CLP8.7 trillion (US$13.1 billion) in 2019. In addition, under the National Health Investment Plan, the government plans to strengthen the public health network with an investment of CLP6.9 trillion (US$10.0 billion) during the period of 2018-2022.

– The total construction project pipeline in Chile – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at CLP86.9 trillion (US$135.8 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards early-stage projects, with 62.9% of the pipeline value being in projects in the pre-planning and planning stages as of November 2019.

GlobalData’s Construction in Chile – Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Chilean construction industry, including –

– The Chilean construction industry's growth prospects by market, project type and construction activity

– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Chilean construction industry

– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Chile. It provides –

– Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Chile, featuring details of key growth drivers.

– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

– Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

– Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.

– Assess market growth potential at a micro-level with over 600 time-series data forecasts.

– Understand the latest industry and market trends.

– Formulate and validate strategy using GlobalData's critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.

Table of Contents

Table of Contents

1 Executive Summary

2 Construction Outlook: At-a-glance

3 Latest News and Indicators

4 Key Drivers and Risks

4.1. Economic Performance

4.2. Political Environment

4.3. Demographics

4.4. Risk Profile

5 Construction Outlook

5.1. All Construction

5.1.1. Outlook

5.1.2. Project analytics

5.2. Commercial Construction

5.2.1. Outlook

5.2.2. Project analytics

5.3. Industrial Construction

5.3.1. Outlook

5.3.2. Project analytics

5.4. Infrastructure Construction

5.4.1. Outlook

5.4.2. Project analytics

5.5. Energy and Utilities Construction

5.5.1. Outlook

5.5.2. Project analytics

5.6. Institutional Construction

5.6.1. Outlook

5.6.2. Project analytics

5.7. Residential Construction

5.7.1. Outlook

5.7.2. Project analytics

6 Key Industry Participants

6.1. Contractors

6.2. Consultants

7 Appendix

7.1. What is this Report About?

7.2. Definitions

8 About GlobalData

8.1. GlobalData at a Glance

8.2. GlobalData Construction

8.3. Disclaimer

8.4. Contact Us

List of Tables

List of Tables

Table 1: Construction Outlook

Table 2: Chile, Key Economic Indicators

Table 3: Chile, Construction Output Value (nominal, CLP Billion)

Table 4: Chile, Construction Output Value (nominal, US$ Million)

Table 5: Chile, Top Commercial Construction Projects by Value

Table 6: Chile, Top Industrial Construction Projects by Value

Table 7: Chile, Top Infrastructure Construction Projects by Value

Table 8: Chile, Top Energy and Utilities Construction Projects by Value

Table 9: Chile, Top Institutional Construction Projects by Value

Table 10: Chile, Top Residential and Mixed-Use Construction Projects by Value

Table 11: Chile, Key Contractors

Table 12: Chile, Key Consultants

Table 13: GlobalData Construction Market Definitions

Table 14: Construction Risk Index Ratings and Scores

List of Figures

List of Figures

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix

Figure 2: Chile, Construction Projects Pipeline by Sector (CLP Billion)

Figure 3: Chile, Residential Permits (Total Numbers)

Figure 4: Chile, Housing Price Index

Figure 5: Chile, Risk Comparison, Q2 2018

Figure 6: Chile, Risk Comparison

Figure 7: Chile, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate)

Figure 8: Chile, Construction Output Value, Growth Matrix

Figure 9: Chile, Construction Output Value, by Sector (CLP Billion), 2014-2023

Figure 10: Chile, Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 11: Chile, Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 12: Chile, Commercial Construction Output by Project Type (CLP Billion), 2014-2023

Figure 13: Chile, Commercial Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 14: Chile, Commercial Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 15: Chile, Industrial Construction Output by Project Type (CLP Billion), 2014-2023

Figure 16: Chile, Industrial Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 17: Chile, Industrial Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 18: Chile, Infrastructure Construction Output by Project Type (CLP Billion), 2014-2023

Figure 19: Chile, Infrastructure Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 20: Chile, Infrastructure Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 21: Chile, Energy and Utilities Construction Output by Project Type (CLP Billion), 2014-2023

Figure 22: Chile, Energy and Utilities Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 23: Chile, Energy and Utilities Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 24: Chile, Institutional Construction Output by Project Type (CLP Billion), 2014-2023

Figure 25: Chile, Institutional Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 26: Chile, Institutional Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 27: Chile, Residential Construction Output by Project Type (CLP Billion), 2014-2023

Figure 28: Chile, Residential Construction Projects Pipeline, Value by Stage (CLP Billion)

Figure 29: Chile, Residential Construction Projects Pipeline, Projected Annual Spending by Stage (CLP Billion), 2018-2023

Figure 30: Chile, Headquarters of Key Contractors (% of Total Project Pipeline)

Figure 31: Chile, Headquarters of Foreign Contractors (% of Project Pipeline with Foreign Contractor)

Figure 32: Chile, Headquarters of Key Consultants (% of Total Project Pipeline)

Figure 33: Chile, Headquarters of Foreign Consultants (% of Project Pipeline with Foreign Consultants)

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