Construction in the region took a battering during the pandemic. Already fragile before COVID-19, construction markets experienced double-digit declines in activity in the year. Colombia, for example, saw production shrink by a quarter. Brazil, with a construction market among the least hit of the South American economies.

Despite the collapse in workload, the major urban centres are, on the ground, still regarded as warm and expected to pick up. This may reflect the high level of urbanisation and the growing proportion living in the region’s megacities. Nevertheless, the consensus is that it will take more than two years in some cases to rebuild workloads to pre-pandemic levels.

South America appears to face more challenges than any region other than Africa. COVID-19 clearly tops the list, but the industry is dogged by delays and red tape, market uncertainties and rising costs – and even skills shortages, despite a material fall in activity levels. There is also some concern emerging that the high levels of investment that had been provided by China may be starting to wane.

Future outlook

After enduring the sharpest contraction of any region, South America is poised for a strong bounce back. But it faces many challenges.

The pandemic exposed weaknesses in the region’s housing and infrastructure. This should be a catalyst for investment but, as ever, attracting foreign investors will be key

Progress of the environmental agenda

The UK is one of six nations to have put a zero-carbon target into law. It has recently committed to cutting South America accounts for less than 5 percent of global carbon emissions and its emissions per capita are well below the global average. However, Argentina and Brazil have plans to increase their production of fossil fuels.

Among Central and South American nations, Costa Rica remains the only country to have officially presented, and started to implement, a long-term decarbonisation strategy. Chile is also amongst the most advanced on striving for net zero-carbon status, with proposals to fix a 2050 target in law.

Regional construction cost performance

Top three construction challenges