Great Prospects for Investment in Construction Materials in Brazil

Prospects for investment in construction materials in Brazil look very good until at least 2016. Industry experts are predicting annual sales of at least R$146.5 billion over the next five years.

These sales figures are based on the excellent performance of the construction materials industry in Brazil during 2010 and the expected increase in the number of Brazilian households. This high growth is pushing the demand for new homes and is the main engine driving property investment in Brazil.

In its quarterly construction materials industry report, the Brazilian Association for the Construction Materials Industry (ABRAMAT) provides figures for 2010 and outlines the perspectives for the next five years. The report confirms the excellent prospects for this niche market in Brazil investments.

According to ABRAMAT, the construction materials industry grew by double digits in 2010 and the expected final figure will be around 12% to 13%. Sales of building materials in Brazil last year averaged R$9.1 billion a month and business done in the year to October 2010 were up 13.4% on the same period in 2009.

Part and parcel of this buoyant market in Brazil was employment in construction. Between January and September last year, 15.2% more jobs were created nationally in the building industry. This figure was even higher in some regions of Brazil – for example, employment in the construction sector rose by 27.4% in north east Brazil and by 24.5% in the north.

ABRAMAT concludes that 2010 was undoubtedly a great year for the construction materials business in Brazil. And the good news for investors is that 2011 looks set to follow suit. On the back of last year’s performance, Brazilian businesses are very optimistic for this year. Industry experts are predicting the growth in sales of building materials to be nearly 9% this year with sustained growth at least until 2016.

This optimism is based on the demographics driving demand for Brazil property. ABRAMAT reports that between now and 2016, the rate of growth in the number of Brazilian families will be over double the rate of population growth generally. The increase in the number of households is set to be even higher. The conclusion is obvious – the higher the number of households, the higher the demand for homes. This translates to an increase in construction and the corresponding rise in building materials sales.

ABRAMAT expects an annual average of R$230 billion to be spent on property investment in Brazil between 2011 and 2016. In tandem with this, construction materials will average sales of R$146.5 billion every year (R$104 billion in basic building materials and R$42.5 billion in finishing materials).

All in all, ABRAMAT predicts an 8.8% growth in construction materials sales in Brazil this year. For the next five years, the Association forecasts that sales will increase by 48%.

For Obelisk International, this latest report into construction materials confirms the huge potential for investment in Brazil’s building industry. The inexorable demand for property from Brazil’s ever-increasing households means that demand for construction materials will also continue on a steady upward trend. Investment in this niche market therefore makes perfect sense.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.