2013-08-23 09:10:47 - Recently published research from Business Monitor International, "Argentina Infrastructure Report Q4 2013", is now available at Fast Market Research
Our view for a sharp slowdown in the Argentine construction sector played out over 2012 and the trend continued through Q1 2013 with a reported contraction of 3.2%. Given the underlying weakness in the market, a result of fundamental policy and regulatory constraints, we maintain our bearish near-term outlook for the sector with a contraction of 2.6% forecast in 2013. There is some upside potential from residential construction - given strong base effects in place - and the oil and gas infrastructure with a number of projects in the pipeline which will contribute with some stable, but weak, growth. However, this will not be enough to offset the downward trend in the industry in 2013. www.fastmr.com/prod/670545_argentina_infrastructure_report_q4_20 ..
Full Report Details at
Key developments in the sector:
* We had for some time anticipated that Argentina's construction sector would experience an abrupt slowdown in 2012, following inflated growth of 9.1% in 2011, as a result of pre-election spending. However, as inflation ticked ever higher, the business environment continued to deteriorate and revenues declined, the slowdown was more abrupt than anticipated with a contraction of -2.64%.
* Our Country Risk team forecasts that Argentina's economy will continue to slow in 2013, with real GDP growth falling to 1.8% from 1.9% in 2012, as currency devaluation pushes inflation higher, weighing on consumer and government spending. Despite government efforts to halt the rapid price growth, our country risk team estimates that consumer price inflation remains above 20% in year-on-year terms.
* Leading indicators for building permits show a contraction of 0.5% during the first five months of 2013, as the industry runs out of steam under the pressure of heavy inflation, import restrictions, a funding squeeze and a slowing macro picture. Policies on the residential construction sector and falling industrial production will have a medium-to-long term impact on the industry. On the upside, infrastructure should remain the one area of growth, as a number of projects progress. However, this will not be enough to reverse the trend of falling industry.
* Nationalisations continue to affect the railway sector. On June 4 2013, the government announced the nationalisation of two cargo railway concessions operated by the Brazilian firm America Latina Logistica (ALL). The first line runs through the centre of Argentina while the second line connects the country with Paraguay, Uruguay and Brazil - they are two of the most important freight railways in all of Argentina. The government argues that the reason for the expropriation is the noncompliance with the contractual agreement in the form of underinvestment, unpaid royalties and accumulated fines for up to 30% of the concession.
* In June 2013, it was suggested that the winner of the 1.74GW Nestor Kirchner-Jorge Cepernic hydropower project in Santa Cruz is a Chinese-led engineering consortium. The two power plants have a combined cost estimate of US$5bn and would take 66 months to build.
Report Table of Contents:
BMI Industry View
- Infrastructure SWOT
- Construction And Infrastructure Forecast Scenario
- Table: Argentina Construction and Infrastructure Industry Data, 2011 - 2016
- Table: Argentina Construction and Infrastructure Industry Data, 2017 - 2022
- Transport Infrastructure - Outlook And Overview
- Table: Major Projects - Transport
- Energy & Utilities Infrastructure - Outlook And Overview
- Table: Energy & Utilities - Major Projects
- Residential/Non-Residential Building - Outlook And Overview
Industry Risk Reward Ratings
- Argentina - Infrastructure Risk/Reward Ratings
- Latin America - Infrastructure Risk/Reward Ratings
- Top Two Out On Their Own
- Best Of The Rest: Colombia And Peru
- Brazil's Faded Glory
- Populist Policies Perturb Investors
- Scale Just One Problem For Central America
- Table: Latin America Infrastructure Risk/Reward Ratings
- Competitive Landscape
- Table: Argentina EQS Data
- Table: Techint Group Consolidated Highlights (US$mn)
- Data Methodology
- Capital Investment
- Infrastructure Risk/Reward Ratings
- Table: Infrastructure Business Environment Indicators
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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