Excellent Year for the Brazil Construction Materials Industry
Latest annual figures issued by the Brazilian Statistics Agency (IBGE) point to a nationwide increase in the cost of construction of 7.36%. The total cost of building a square metre in Brazil was R$769.06 at the end of the year with construction materials accounting for R$434.25 of the total.
For Guido Mantega, Finance Minister under Lula, “the construction industry has been one of the major engines of Brazilian economic growth”. Powering the Brazil construction industry are several factors, all with good long-term prospects.
Perhaps the most important factor is the government social housing programme, Minha Casa Minha Vida. Building 3 million homes by the end of 2014, Minha Casa Minha Vida is responsible for huge investment in property throughout Brazil. The programme is heavily over-subscribed in most cities and a major force behind the current boom in construction in Brazil.
The wider availability of credit, both for developers and homeowners, is also a driving force behind the big increase in construction costs. As mortgages become easier to obtain and lending criteria more flexible, demand for property rises. And the third factor is Brazil’s booming economy whose growing employment and salary levels mean that demand for property in Brazil stands at one of the highest ever.
The good news for those planning investment in real estate or construction materials in Brazil is that these factors are here to stay for the short to medium term. In an interview in the business publication, Valor, Fabio Romão from LCA Consultores stated that “the perspectives are good for all the sectors related to the construction industry”. This includes all manufacturers and suppliers of building materials from basics like cement to finishing touches such as taps.
Further good news for construction in Brazil came at the end of last year when the government announced that building materials will continue to qualify for important tax discounts. These discounts will apply for the whole of 2011 and are a welcome boost for developers and builders, already enjoying booming business.
For Obelisk International, the construction industry in Brazil represents an obvious investment opportunity. The latest figures for 2010 are a clear indication of the power of the industry and those for 2011 will undoubtedly show a similar pattern.
About Obelisk International: Obelisk International offers select investment opportunities in Brazil and gives investors security, profitability and diversity thanks to a combination of close attention to our clients' investment requirements and high quality in-house research and analysis.
For more information on investment in Brazil and to find out about Obelisk International’s latest projects there, contact us on 0034 952 820 319. Via email: firstname.lastname@example.org or visit our website: www.obeliskinternational.com.
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