2014-01-03 17:27:05 - Recently published research from Timetric, "Construction in Venezuela - Key Trends and Opportunities to 2017", is now available at Fast Market Research
The Venezuelan construction industry increased in value at a CAGR of 21.68% during the review period. However, in real terms, the CAGR increased only by 2.34% as a result of high inflation in the Venezuelan economy. Growth in the industry was driven by a large-scale housing program undertaken by the government, infrastructure projects in railways and energy, and continuation of social spending initiatives. The industry is anticipated to post a CAGR of 15.84% over the forecast period. However, excessive government intervention and nationalization of key sectors are issues that need to be addressed to enhance investor sentiment. Moreover, owing to high inflation in the country, the industry's output growth rate is expected to remain in the range of 15% to
17% over the forecast period. However, the real outlook, without inflation, is bleak due to sluggish external demand for oil, the country's main export commodity. Moreover, the US, the main import partner for oil from the country, has been diversifying its import base and importing lesser volume from Venezuela due to decline in production.
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* According to Central Bank of Venezuela (BCV) figures, the country has registered steep rise in inflation rates in recent years. The consumer price index in the country increased by 49.4% in September 2013 compared with the same period in 2012. With high inflation, a deteriorating business environment and depreciating domestic currency against the US dollar, the real growth rate of the construction industry's output is expected to remain weak over the forecast period.
* Growth in the construction industry slowed to 9.1% in 2012, after registering above 14% growth during 2008-2011 as the industry experienced the pressure of material shortages and power shutdowns along with a decline in growth of public funding as export revenues from oil, which is a main source of finance to these projects, grew by just 4% in 2012, compared to 35% in 2011. The trend has continued, and the construction industry's real growth rate for the first two quarters of 2013 of was -3.4%. The contraction was caused by a decline in government spending on its mass housing construction program.
* Construction value added in nominal terms registered a CAGR of 21.49% during the review period to reach VEF131.1 billion (US$30.5 billion) in 2012. Over the forecast period, the growth in construction value added is likely to be lower, at a CAGR of 16.90%, as contractors experience a challenging period with supply constraints and legal and bureaucratic bottlenecks likely to delay execution of projects.
* Despite a moderation in the growth of the working-age population (15-64 years) from 2.9% in 1990 to 1.7% in 2012, the share of working-age population to total population increased from 58.3% in 1990 to 65.2% in 2012. This was mainly due to a fall in the share of the young-age population from 38.0% to 28.8% during the same period. According to UN statistics, the dependency ratio moderated from 71% in 1990 to 53.6% in 2012 as the working-age population grew. However, this trend is likely to reverse by 2050, with the dependency ratio reaching 54.8% as the share of the old-age population reaches close to 16.5% of the total population
* Multinational companies in the country are investing surplus profits in commercial property, as there is a ban on the outflow of money. With rising inflation, commercial property is considered to be a preferable option for companies as returns on investment in property are likely to be higher as property value for deals in the country is determined at the unofficial exchange rate (market rate), which is higher than the official rate (as fixed by the government).
This report provides a comprehensive analysis of the construction industry in Venezuela:
* Historical (2008-2012) and forecast (2013-2017) valuations of the construction industry in Venezuela using the construction output and value-add methods
* Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
* Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
* Analysis of key construction industry issues, including regulation, cost management, funding and pricing
* Assessment of the competitive environment using Porter's Five Forces
* Detailed profiles of the leading construction companies in Venezuela
Reasons to Get this Report
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* Evaluate competitive risk and success factors
Companies Mentioned in this Report: Vepica CA, Inelectra SA CA, Tecnoconsult, SA, The Y&V Group, Constructora Norberto Odebrecht de Venezuela CA
Timetric is an independent economic and business research firm providing critical intelligence on emerging economies and key global industries. They provide detailed economic and sector intelligence, business insights and authoritative, independent commentary. View more research from Timetric at www.fastmr.com/catalog/publishers.aspx?pubid=1037
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