The Latin America construction market appears to have steadied, according to results of an AEM survey conducted at last October's at CONEXPO Latin America show.
AEM’s Market Intelligence department conducted an on-site survey of roughly 170 show attendees and exhibitors, who were asked about their 2015 workload and expectations for 2016.
Benjamin Duyck, AEM market analyst provided the following commentary:
Not All Experienced a Downturn
When asked about their workload in 2015, both exhibitors and attendees were almost evenly split between those who felt it increased versus decreased, with a slight lean towards increased. It appears not everyone experienced a downtrodden market. Major decreases were due to the crisis in Brazil, low commodity prices (copper) and the strong U.S. dollar.
These events did increase uncertainty for some. The more positive experiences over the past year were linked to companies exploring new markets through a multi-country market approach or the development of niche markets. It also appeared operational efficiency remained key in this economic environment.
Divergence of Views on 2016
Opinions on 2016 appeared to diverge. The number of attendees expecting market increases versus decreases remained similar to 2015. Exhibitors, however, expect 2016 to look a lot rosier than 2015. Respondent comments focused on continued uncertainty, with pent-up demand and new markets. A large percentage (29-34%) felt the market would remain stable.
There are several possibilities for the difference in opinion. One of the questions in the survey asked about the level of government spending on infrastructure, to which exhibitors responded positively (62 percent) that they had noticed an increase, while attendees felt the opposite was true, with 58 percent indicating a decrease.
Disagreement on Infrastructure, Sector Growth
Another question was asked about the level of government spending on infrastructure, to which exhibitors again responded positively (62 percent) that they had noticed an increase while attendees felt the opposite, with 58 percent of respondents indicating a decrease.
When asked which sectors would see the most growth, exhibitors indicated Transport (36 percent), Energy (25 percent) and Residential. Attendees, on the other hand, felt Energy (56 percent) and Commercial (17 percent) were the hot spots.
Perhaps these differences give deeper insight into the expectations for 2016. On the other hand, perhaps some of the overall optimism can be tied to a better understanding of what to expect in 2016, given 2015.
Two-thirds Plan to Rent
Finally, AEM inquired about the desire to buy or rent more equipment. More than half of respondents felt no need for additional equipment. Of those who planned to invest, nearly two out of three leaned towards renting versus buying. Respondents said they planned to buy equipment only when certain of its need in the long run. They also felt that less investment equals fewer worries. Some contractors breaking into niche markets said they will continue to rent only specialized equipment.
For more information, contact AEM Market Intelligence Analyst Benjamin Duyck (firstname.lastname@example.org, tel: 414-298-4154).