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Market |
Construction |
Report Type |
Market Research |
Country |
Chile |
Published |
2 September 2009 |
Number of Pages |
65 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Despite Chile’s strong business rating and government stimulus, the country’s infrastructure industry is still strongly feeling the effects of recession. The construction sector is forecast to undergo a contraction of 5.5% year on year. The report forecasts that the industry will be worth an estimated US$11.52bn in 2009 .
While growth is forecast for 2010, the infrastructure sector is expected to stagnate after this until the end of the forecast period in 2014 .
There are several major projects underway or planned to increase communication and trade in the region .
One example is the inter-oceanic tunnel designed to link the Argentine port of Buenos Aires to Chile's Valparaíso. There are also plans for a 150km tunnel connecting Bolivia, Peru and Chile. The tunnel will provide Bolivia with access to the sea and involve construction of a man-made island in the Pacific Ocean. While these projects will undoubtedly bring benefits in the long term, they may allow neighbours to compete more effectively with Chile in the short term .
The business environment in Chile is rated highly with strong scores for country structure and risks .
Overall, it receives a score of 61.4 in the business environment ratings – second only to the US in the Americas region. Despite a fall in the previous quarter, Chile has regained its position thanks to an increase in gross fixed capital formation. There has been a general homogenisation across the Americas region with lower ranked countries catching up with the leaders. Chile’s project finance ratings remain unchanged in second place behind the US with an overall score of 64.5 Chile has large government surpluses thanks to the strong trade in copper, the country’s primary export, over recent years. As a result the country is well placed to take advantage of circumstances once the region comes out of recession provided the effects do not last too long. There is, however, danger of downside risks to Chile’s skills base in the construction industry if recession lasts far into 2010.
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