Sobratema predicts $6 billion-a-year spend on construction equipment
More than US$ 800 billion of major infrastructure investment projects will drive increasingly high levels of demand for the global construction equipment supply sector in Brazil over the next five years, according to a new report from Sobratema, the Brazilian association of technology for construction and mining.
The entire chain of supplies and services will benefit from a massive Brazilian road-building and social housing construction boom as the country gears up to host the 2014 soccer World Cup and the 2016 Olympic Games.
Sobratema’s research team reckons that construction equipment sales volumes will grow by an average of 10.6% per annum through to 2017, with the growth rate peaking in 2014. “The volume of business involving replacement parts, supplies and services for the construction and mining equipment sectors will be more than US$ 6 billion a year during this period,” added the trade body.
And, just to prove the point, the Brazilian federal government has recently adopted a “programa de aceleracao do crescimento” (programme for the acceleration of growth) which will “grant possible concessions for highway projects”, said Sobratema.
Earthmoving equipment sales will go up by more than 13% this year, Sobratema estimates.
In the immediate future, construction equipment sales should grow by 11.8% in Brazil during 2013, said Sobratema, with 76,000 units being sold. Sobratema estimates that the global construction equipment market in 2012 was worth approximately US$100 billion on an estimated total sales volume of 925,000 units.
Sobratema bases its market outlook on a regular survey of construction contractors and equipment rental businesses across the country.
The biggest problem for the Brazilian road-building and construction equipment sectors remains project delays and government bureaucracy. “The main problems (in 2012) were delays in projects and a shortage of skilled labour. Projects got delayed because of environmental licensing problems, slow tender processes and late payments on public projects.”
President Dilma Rousseff will certainly want to see job creation and infrastructure investment deals to look very positive this year and next as she gears up for Brazil’s general election in 2014.