Latin America, September 8, 2025
News Summary
Two recent studies present conflicting size and growth estimates for the Latin America construction market but agree on core dynamics: robust urban and infrastructure demand, large public investment programs and expanding PPPs, cost and logistics pressures, a widening skills gap, heightened climate risks, and increased focus on sustainability and digital tools like BIM and digital twins. Brazil leads regional share while housing shortfalls and major transport and smart‑city projects drive activity across countries. Success will depend on managing materials and logistics costs, closing workforce gaps, strengthening climate resilience, and accelerating planning and digital adoption.
Latin America construction market: strong demand and big investment plans, but wide estimates and clear risks
The Latin America construction market is set for sustained activity through the decade, driven by urban growth, housing shortfalls and large public works programs. However, two recent reports give very different size estimates and growth rates, highlighting uncertainty even as planners and contractors prepare for major projects. Common themes across the analysis include large planned investments, growing use of public–private partnerships, pressure from material and logistics costs, a shortage of skilled labor, rising climate risks, and stronger focus on sustainability and digital tools.
Topline numbers and the divergence in forecasts
Forecasts differ sharply. One analysis lists the 2024 market at USD 1.07 billion and projects growth to USD 1.13 billion in 2025 and USD 1.64 billion by 2033, noting a compound annual growth rate (CAGR) of 5.16% for 2025–2033 while also including an alternate CAGR of 2.61% in its metrics. Another report gives a much larger 2024 figure of USD 9.11 billion, projects a 4.20% CAGR from 2025–2034 and a market near USD 13.75 billion by 2034. An FAQ item in the source material also notes a market near USD 1.13 billion in 2025 and a central expectation of roughly 5% CAGR through 2030.
Why activity will be strong
Several long-term drivers will keep construction busy across the region. Urban populations are rising fast: over 400 million people already live in cities and urban residents are expected to reach 500 million by 2030. Roughly 81% of the region lives in cities today. That growth outpaces housing supply and leaves millions in substandard dwellings; in some countries over 25% of people live in poor housing and in Colombia nearly 27% of urban households are in informal settlements. Domestic mortgage and social housing finance are active in response, with national institutions supporting large volumes of homebuilding annually.
Public projects, PPPs and major funding
Governments are planning and funding big infrastructure programs. One national plan aims to invest the equivalent of about USD 27 billion in roads and rail by 2026. Regionally, public investment commitments and multilateral loans were reported above USD 22 billion for public construction projects in a recent year. Broadly, governments are expected to invest roughly USD 2.2 trillion in major construction and maintenance across energy, sanitation, logistics and housing over coming years. The transport PPP model is increasingly used to close financing gaps for highways, rail and mass transit.
Country snapshots and market structure
Brazil is the largest market, holding about 34.3% of regional construction share in 2024 and running large federal programs that freed significant funds for highways, rail and sanitation. Building construction is the single biggest segment at about 58.3% share, with land planning and development expected to grow fastest among segments at a projected 7.4% CAGR. The private sector remains the largest buyer, while public sector activity is forecast to grow faster, near 6.8% CAGR. Large contractors took more than 54% of market share in 2024, while small contractors are the fastest-growing group with a projected 8.1% CAGR.
Cost pressures, skills gaps and climate risks
Projects face several stiff constraints. Material prices are volatile because of import dependence, high energy costs and transport bottlenecks; one country imports over 60% of its construction materials. Logistics in the region are costly—about 30% higher than in East Asia according to a multilateral bank estimate. Labor is another weak point: a large share of construction workers operate informally, and technical education enrollment is low, producing shortages of trained technicians. Natural hazards are a real threat: many assets sit in high‑risk zones, only a minority of countries have comprehensive climate‑resilient building codes, and recent storms destroyed thousands of homes in vulnerable areas.
Efficiency, dispute risks and digital solutions
To reduce cost and delay, planners are investing more in pre-construction land planning and digital tools. Early planning can cut total project costs by double digits. Digital trends include BIM, digital twins, AI and prefabrication. Arbitration and dispute resolution are major features of the market given the scale of transactions; international and domestic arbitration cases have increased, particularly for large transport and energy projects. Common causes of disputes include delay, underbidding, community protests and regulatory shifts.
What this means for firms and policymakers
The market offers large opportunities but requires careful risk management. Successful projects will combine strong planning, investment in workforce training, use of digital and prefabrication methods, climate resilience measures and clear procurement frameworks to limit disputes. Public–private partnerships and multilateral finance are expected to remain key levers to deliver big projects while spreading risk.
FAQ
Q: How big is the Latin America construction market right now?
A: Estimates vary. Some analyses list the 2024 market at about USD 1.07–1.13 billion, while other reports place it much higher near USD 9.11 billion for 2024. Projections differ accordingly.
Q: What are the main growth drivers?
A: Rapid urbanization, housing shortages, large national infrastructure programs, renewable energy projects and increasing adoption of green building practices are the main drivers.
Q: What are the top risks to projects?
A: Key risks include material and logistics cost volatility, labor shortages and informal work, regulatory and permitting complexity, community opposition and climate-related hazards.
Q: Which parts of construction are expanding fastest?
A: Land planning and development is forecast to grow fastest at around 7.4% CAGR among segments, while small contractors are the contractor group with the fastest projected growth.
Key features at a glance
| Feature | Detail |
|---|---|
| Market size (2024) | Conflicting estimates: USD 1.07–1.13 billion and USD 9.11 billion |
| Growth outlook | CAGR range: about 2.6%–5.2% (reports differ); another projection 4.2% to 2034 |
| Main demand drivers | Urbanization, housing gaps, infrastructure modernization, renewables |
| Key risks | Material/logistics costs, skill shortages, permitting, climate hazards |
| Public funding | Large national plans; multilateral loans > USD 22 billion committed in one recent year |
| Sector leaders | Mix of large national contractors, regional firms and global players; consolidation underway |
| Tech & sustainability | Growing use of BIM, digital twin, prefab, low‑carbon materials and green building standards |
Deeper Dive: News & Info About This Topic
Additional Resources
- Market Data Forecast: Latin America Construction Market
- Wikipedia: Construction in Latin America
- GlobeNewswire: Latin America Construction Industry Report 2025
- Google Search: Latin America construction industry report 2025
- BizWire / ResearchAndMarkets: Latin America Construction Chemicals Market
- Google Scholar: Latin America construction chemicals market
- JLL: Latin America Construction Overview
- Encyclopaedia Britannica: Latin America construction
- LatinLawyer: Arbitrating construction disputes in Latin America
- Google News: construction arbitration Latin America
Author: Construction CA News
CALIFORNIA STAFF WRITER The CALIFORNIA STAFF WRITER represents the experienced team at constructioncanews.com, your go-to source for actionable local news and information in California and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rose Parade, Coachella, Comic-Con, and the California State Fair. Our coverage extends to key organizations like the California Building Industry Association and Associated General Contractors of California, plus leading businesses in technology and entertainment that power the local economy such as Apple and Alphabet. As part of the broader network, including constructionnynews.com, constructiontxnews.com, and constructionflnews.com, we provide comprehensive, credible insights into the dynamic landscape across multiple states.
