In real terms, the Colombian construction industry recovered in 2018, after registering a lackluster performance in 2017. It registered an annual growth rate of 0.8% in 2018 - up from -2% in 2017. This recovery was driven by positive developments in economic conditions, which led to a revival in both investor and consumer confidence.
The country’s construction industry is expected to register a decline of 1.8% in real terms in 2019, due to the continued weakness in residential investments. Residential construction, which is one of the main engines of the country’s economy, has fallen considerably in the past two years, with the total land permitted in 2018 falling by 6.1% in comparison to levels registered in 2017. The construction sector is set to return to growth in 2020, driven by greater investments, especially in transport, energy and commercial buildings, with a large number of projects already underway across the country.
To improve logistical efficiency, the government plans to increase the commercial rail network from 420km to 1,077km during the period of 2018-2022 under the National Development Plan. With an investment of US$4.3 billion, the government plans to construct the first metro line in Bogot? by 2025. In October 2019, Siemens, the German-based technology company, announced plans to invest US$574.7 million in transportation and energy infrastructure in Colombia.
The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 1.87% over the forecast period (2019-2023).
However, ongoing civil protests in the country are expected to have a negative impact on Colombia’s economy, which could have an adverse impact on construction spending. In November 2019, protests began in response to the government’s plans to reduce benefits for workers and retirees, and support the country’s peace agreements. These escalated into a broader protest over dissatisfaction with President Ivan Duque’s administration on economic reforms, corruption, violence and environmental protection.
GlobalData expects the infrastructure construction market to account for 42.5% of the industry’s total value in 2023, supported by investments on development of the country’s road network under the Fourth Generation (4G) program. The plan seeks to construct and repair 7,000km of roads by 2024. In July 2019, the consortium led by China Harbour Engineering Company secured US$658.2 million for the financing of the US$1.5 billion Autopista al Mar 2, which is part of the US$8 billion 4G road program.
- Residential construction market’s output over the forecast-period will be driven by the government’s efforts to construct affordable housing units. According to the Ministry of Housing, City and Territory, under the government housing programs, 520,000 affordable housing units will be constructed during the period of 2019-2022, of which 126,000 are expected to be constructed in 2019.
- GlobalData expects the energy and utilities construction market to register a forecast-period CAGR of 2.51% in real terms in 2023, supported by public and private sector investment in energy and utilities construction projects and the government’s efforts to promote renewable energy. The government aims to generate 1,500MW of energy through non-conventional renewable energy sources by 2022. In October 2019, the government auctioned contracts for new solar and wind power with a combined capacity of 1,298MW.
- The government’s investment on the development of the country’s education sector under the National Development Plan 2018-2022 is expected to support the institutional construction market’s output over the forecast period. The plan seeks to provide pre-school and primary education to 2 million children by 2022, and double the number of students attending the single session school day from 900,000 to 1.8 million during the period of 2018-2022.
- The total construction project pipeline in Colombia - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at COP306.1 trillion (US$103.5 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 64.9% of the pipeline value being in projects in the pre-execution and execution stages as of December 2019.
Our Construction in Colombia - Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Colombian construction industry, including -
- The Colombian 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 Colombian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
This report provides a comprehensive analysis of the construction industry in Colombia. It provides -
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Colombia, 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
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- Assess business risks, including cost, regulatory and competitive pressures.
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