Rising copper prices buff up economic prospects
Rising commodity prices are fuelling optimism for 2018, with GDP growth forecast at 3.0 percent, after a 1.4 percent rise in 2017. Employment growth in 2018 should help reverse the rise in 2017 in unemployment, which at 7 percent hit a five-year high. The key drivers of growth have been household spending and rising exports, buoyed by strengthening copper prices. Almost half of Chile’s exports relate to copper.
Construction expanded modestly in 2017, but investment of USD28bn in infrastructure and the energy sector should prompt much stronger growth.
Within USD1.7bn of planned investment in airports is the USD655m expansion of Arturo Merino Benitez international airport. USD8bn investment in roads includes the USD1.98bn Costanera Central highway. There is growing promise in the energy sector, mainly in wind and solar projects.
|Cost escalation 2017–18:||2.0%|
|Cost escalation 2018–19:||2.5%|
|Location factor (USD):||59.0|
Housing should reclaim its position as the dominant construction sector, with its share expected to rise to 35 percent in 2021, driven by public and private sector investment to meet growing demand.
Meanwhile, the government’s focus is on infrastructure. The Cámara Chilena de la Construcción (Chilean Chamber of Construction) estimates USD151bn of investment is needed in infrastructure projects by 2025 to support economic growth and shortfalls in public works.
This content is part of the International construction market survey 2018