Civil Construction Industry in Brazil
With a large domestic market, favourable government measures and strong economic growth in the mid 2000s, Brazil has one of the most prosperous civil construction industries in the world. In this article, we will take a closer look at this industry’s numbers.
Overview
The Brazilian civil construction industry is a strong one. This is due mainly to its large market, as Brazil has a population of around 200 million people and many social programs that boost it. As of 2013, there were more than 104.000 civil construction companies employing around 3,5 million people in Brazil, according to an annual report published by CBIC, which is the Brazilian Chamber of Construction Industries.
Market Size
The civil construction industry in Brazil amounted to an impressive BRL 340,6 billion in 2013. Despite the good numbers posted in previous years and an average annual growth rate of 5,3% between 2006 and 2011, this industry grew at an average of only 1,5% between 2012 and 2013.
Estimates for 2014 were not very optimistic, with an estimated annual growth between 0,5% and 1% and they were even worse for 2015, as estimates appointed a growth near to 0%. The end of the works for the FIFA 2014 World Cup and of the Brazilian government housing program Minha casa, Minha vida, as well as the general slowdown the Brazilian economy is experiencing are the main factors responsible for the slow growth of this industry in Brazil.
Sectors in the Industry
According to an annual report published by IBGE, the Brazilian Institute of Geography and Statistics, the Brazilian civil construction industry is divided into the following sectors:
- Construction of buildings, more than 43.000 companies have generated over BRL 145 billion in 2013
- Infrastructure works, more than 10.000 companies have generated over BRL 138 billion in 2013
- Specialized services, more than 51.000 companies with a total revenue of more than BRL 57 billion in 2013
Minha Casa, Minha Vida
While the average cost per square meter in Brazil may be considered relatively low, BRL 1.154 in February 2015, this is because of the government’s social housing program Minha Casa, Minha Vida, which drives the Brazilian civil construction industry forward.
Works for the Minha Casa, Minha Vida represented more than 32% of the country’s housing construction in 2013. With investments of more than BRL 193 billion, this program employed over 1,3 million in 2013, while generating revenue of over BRL 12,2 billion in the first semester of 2013.
In fact, works acquired by public entities amounted for BRL 114,1 billion in 2013, 35% of this industry’s total revenue, which shows the major importance of the public demand in Brazil for this sector.
Regional Production
Works in the civil construction industry in Brazil are highly concentrated in the Southeastern region of Brazil. In fact, it generated 62% of all revenue for this industry in 2012. The other Brazilian regions and their share in revenue for the civil construction industry are:
- Northeastern region, having generated around 14,2% of all revenue
- Southern region, generating 13,3% of total revenue
- Mid-Western region, having generated 7,4% of all revenue
- Northern region, generating 3,1% of all revenue
Main players
The main players in the civil construction industry are:
1. Norberto Odebrecht
Norberto Odebrecht is the largest civil construction company in Brazil. Originally from the state of Rio de Janeiro, it had a total revenue of more than BRL 10,1 billion in 2013. Also, the company employed over 125.000 people in the same year. For the FIFA 2014 World Cup, Odebrecht built stadiums in the cities of Salvador, Recife and São Paulo, while renovating the stadium in Rio de Janeiro. Apart from these, Odebrecht is best known for constructing subway lines, ports and airports and even hydroelectric plants.
2. Andrade Gutierrez
Andrade Gutierrez is from the state of Minas Gerais and had a total revenue of over BRL 5,3 billion, while employing 14.400 people in 2013. Andrade Gutierrez is best known for its construction in the sectors of public transport, airports and even nuclear plants.
3. OAS group
OAS group is a civil construction company from the state of Minas Gerais and had a total revenue of over BRL 5,1 billion in 2013. It employed over 122.000 in 2013. The OAS group work in roadways, oil extraction and public transport.
4. Camargo Corrêa
Camargo Corrêa is from the state of São Paulo and had a total revenue of BRL 4,7 billion, while employing 32.500 people in 2013. The company produces cement and builds roadways and hydroelectric plants among other works.
5. Queiroz Galvão
Originally from the state of Rio de Janeiro, Queiroz Galvão had a total revenue of over BRL 4,6 billion and employed nearly 17.000 people in 2013. This company mainly build public transport works and hydroelectric plants.