DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/xnhdq2/brazil_infrastruct) has announced the addition of the "Brazil Infrastructure Report Q3 2012" report to their offering.
As the hype surrounding Brazil continues despite a sharp slowdown in construction industry growth in 2011 (estimated at 3.6% by BMI), we continue to highlight the risks to investment. The opportunities on offer are undeniable, and this is driving our optimistic growth outlook, with average growth of 6.8% anticipated between 2012 and 2016. This figure could be much higher if all investment pledged eventuates; however, we believe that the multitude of risks endemic in Brazil's infrastructure sector will erode growth.
Potential Hard To Ignore Brazil's infrastructure and construction sectors are attracting significant attention as a result of the huge investment planned. We estimate that there are US$150bn worth of projects under way or in the planning phase, whilst the government's growth acceleration plan (PAC II) is calling for investment totalling BRL959bn (US$518bn) between 2011 and 2014. With the added urgency of the two sporting tournaments to be hosted in the next few years, the country is feverishly upgrading infrastructure to meet strong demand from a growing population and economy.
Investment is being driven by a number of factors:
-The PAC II includes BRL958.9bn (US$518bn) to be invested in infrastructure between 2011 and 2014, with a further BRL631.6bn (US$341bn) to be invested beyond 2014. The plan includes provisions for housing, transport and energy, as well as social welfare measures such as electrification and water provision. Of the planned investment, 80% is expected to come from public funds (including state-owned companies), whilst 20% will come from the private sector, supported by below market rate loans from BNDES.
-The housing sector should continue to experience strong growth. A focus on homebuilding through the Minha Casa, Minha Vida' low income housing programme has been announced by the finance minister, with 600,000 new homes planned in 2012, up from 457,000 in 2011. Around BRL40bn has been assigned for the programme under the 2012 budget. At the same time, both Caixa Economica Federal and Banco do Brasil are upping their mortgage funding for 2012, whilst the government continues to cut the benchmark rate to encourage lending. Housing loans grew 44% in 2011 and strong growth is expected to be repeated in 2012.
Companies Mentioned
- Grupo Camargo Corrêa
- Odebrecht
- Centrais Eletricas Brasileiras SA (Eletrobrás)
For more information visit http://www.researchandmarkets.com/research/xnhdq2/brazil_infrastruct.