Itaú BBA - Construction: Sector Expects Better Performance in 2013

Sector Insights

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Construction: Sector Expects Better Performance in 2013

abril 19, 2013

After weaker sales and reduced launches in 2012, the Brazilian residential property sector expects an improvement in 2013.

Dear clients and friends,

We are proud to present our new "Itaú Sector Insights". In this series, reports will take a closer look at different sectors of the Brazilian economy, including current events, trends and challenges. This first edition addresses the construction sector.

We hope you enjoy reading it,

Best Regards,

Ilan Goldfajn


Construction: Sector Expects Better Performance in 2013

  • After weaker sales and reduced launches in 2012, the Brazilian residential property sector expects an improvement in 2013.
  • Residential property price indexes continue to rise, but more moderately. The period that started at the end of 2009, when the sector grew faster, is now past.
  • Commercial properties, on the other hand, have maintained strong demand in major metropolitan areas in 2012, despite the reduction in the number of launches.
  • Shopping centers are currently at their best moment. With growing consumption, new shopping centers are being launched all over the country. Launches are forecast to continue at a rapid pace in the coming years.
  • For the building materials industry, sales were not that good in 2012 either, but data show that 2013 brought some improvement. Expectations regarding deliveries of units launched in recent years, the Minha Casa Minha Vida habitational program, infrastructure works, in addition to the maintenance of IPI tax cuts, all bring optimism for the year.
  • Infrastructure works were below expectations in 2012. However, the outlook is improving in 2013. In addition to the stadiums and transportation works for the 2014 World Cup, which are expected to accelerate this year, other projects are also part of the government’s plans for the coming years, such as power plants, a new petrochemical complex and the pre-salt.

Please open the attached pdf to read the full report.



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