The Brazilian construction market will see limited growth over the next five years, according to Timetric’s Construction Intelligence Centre (CIC).

It says the deteriorating economy, a weak property market, and a lack of investor confidence will be the reason for its shortfall.

The industry’s output value fell from US$ 226.3 billion in 2013, to US$ 214.9 billion in 2014. This was due to a budget deficit and the ‘Operation Lava Jato’ (Operation Carwash), an investigation into corruption at the state oil company, Petrobras. This resulted in low confidence and a delay in projects, affecting the demand for activity in 2014, the company said.

However, the 2016 Olympic Games in Rio de Janeiro are predicted to increase activity, resulting in a slight growth to US$ 215.1 billion in 2015. Output value is then expected to fall after the Games, to an estimated US$ 204.1 billion in 2019.

Residential construction was the largest market during the review period at 31% of the total. Timetric said the government’s efforts to offset the country’s housing deficit, lower interest rates and an expanding middle-class population supported the market, which posted a nominal compound annual growth rate (CAGR) of 14.9%. Over the forecast period, the market is expected to remain the largest, with a share of 29.6% in 2019.

Infrastructure was the second-largest market at 28.5%, and it expects to stay strong throughout the Games, due to its need for stadiums, transport and hotels.

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