Headwinds dominate downwind autumn 2014

Published 28/10, 2014

Dear ReaderWe are now well on the way to the end of the year, which is showing mixed fortunes. So far the second half of the year looks promising in some parts of the world, but forecast of little change in other areas. In Europe the construction related business could be summarised as okay. In some northern European markets, such as the UK, France and Germany, business is picking up. However, the situation in the southern area in countries like Greece, Italy and Spain, the situation is more or less unchanged. However, there is an indication of a slight and slow upturn in Spain.

The US construction industry is continuing to show recovery with increased growth. The Asian construction market is also considered to be healthy with China in the lead followed by India. The Middle East is showing a stronger and faster increase then expected. In Australia the construction industry growth is continuing to decline compared to the strong level in 2011 and 2012. However the industry is growing, but at a slower pace then before. The market situation in South America is very diverse and varying very much from country to country. Chile has shown a strong growth in recent years in terms of infrastructure. However, the growth was initially estimated at 3.6% this year, but has since been downgraded to 2.1%. This is due to the construction industry showing lower growth than expected, particularly in the first quarter. Colombia however, is experiencing tremendous growth of 9.6% and higher for 2014 and 2015. There is particularly strong momentum in the transport infrastructure sector, especially road projects. Argentina has shown very week development for several years, but is finally showing some positive signs of recovery. The construction industry growth has been on the modest level of 1.5%, but it is anticipated that the growth level for the coming five years will be at around 3.3% and above. The Mexican construction industry has reported a strong expansion during the last five years, but came to a slight halt in 2013 with around 4% to 5% due to persistent delays in reviving public sector investments and depressing the housing market. But it is expected that growth will start to fall in 2014 to about 3% and 4% during 2015. In Latin America’s largest economy Brazil the construction industry has been kept at an extremely high level due to many reasons, like the recent Football World Cup and the Olympic Games in 2016. But unfortunately fundamental issues in Brazil’s business environment undermine the growth potential in the construction sector and things could be better if those issues were resolved. The election in 2014 has to some extent paralysed development this year. Analysts believe that 2015 to 2018 will generate a higher growth on average of around 3.8% compared to an average of 2.2% between 2011 and 2013. In the coming years construction will start on major road and airport projects, and several port and rail projects will be released for tender.
The Latin American market is of particular interest to PDi and its sister publication Professional Demolition Americas (PDa) due to our new industry event on 1-2 October 2015, the Latin American Concrete Cutting and Demolition Forum to be held in Rio de Janeiro. The preparation is well underway and more information is available on the Forum’s website www.latindemoforum.org. Several industry associations are supporting the event. These include Sobratema, Brazil’s association for construction and quarry machinery, ABRECON, the association for recycling of construction and demolition waste, ALEC, Brazil’s rental association for construction machinery, the European Demolition Association, the Institute of Demolition Engineers, International Association for Concrete Drillers and Sawers and ICPSC, the International Concrete Polishing and Staining Conference and Concrete Polishing University. There will also be a number of lectures and round table discussions on interesting topics for the Brazilian construction industry with speakers from the Brazilian industry and abroad. A preliminary conference programme will be available shortly on the Forum’s website. But we are also open to suggestions on topics from the industry.
I hope to see many of you in Rio de Janeiro in October next year.

Jan Hermansson


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