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 shows strong demand but figures diverge across reports
Key takeaway: Two major market reports released for 2024–2034 show different estimates of market size but agree on the region’s main pressures and opportunities. Across countries, construction demand is being driven by rising city populations, large public infrastructure plans and growing interest in greener, smarter building methods. At the same time, material and logistics cost pressures, a shortage of trained labor and climate risks are set to shape projects and costs.
Top facts up front
One market study lists the Latin America construction market at about USD 1.07 billion in 2024 and forecasts roughly USD 1.13 billion in 2025, rising to USD 1.64 billion by 2033 with a compound annual growth rate (CAGR) of 5.16% for 2025–2033 (that same study also includes a different CAGR figure of 2.61% in another section). A second market study estimates a much larger base of USD 9.11 billion in 2024 and projects growth to nearly USD 13.75 billion by 2034 with a 4.20% CAGR for 2025–2034. An FAQ note in the material also describes a roughly 5% CAGR through 2030 in one projection.
Why the numbers matter
Even with conflicting totals, both reports point to stronger activity in urban housing, transport, energy and sanitation projects. Governments and lenders are planning and committing large sums, with public institutions and multilateral lenders putting tens of billions into projects and loans. Private builders and large contractors remain central players while small contractors are expected to grow faster as modular and digital tools spread.
Drivers of work and investment
Urban growth is a major driver. Over 400 million people already live in cities across the region, and urban populations are expected to reach about 500 million by 2030. That rapid shift has left housing shortfalls and substandard living conditions in parts of the region: in some countries over a quarter of people live in substandard housing and nearly 27% of urban households in one country live in informal settlements.
Public investment and PPPs are prominent: major national programs and planned spending aim to modernize roads, rail, ports and sanitation. One national agency plans large investments in road and rail through 2026 worth roughly USD 27 billion. Across the region, governments are expected to invest about USD 2.2 trillion in important infrastructure and maintenance over time, while multilateral lenders committed more than USD 22 billion in loans and grants to public construction projects in a recent year. Public–private partnerships are described as a key model to close funding gaps for transport and mass transit.
Country mix and market shares
Market concentration is clearly uneven. One country accounted for about 34.3% of the region’s construction market in 2024. National programs in larger markets have unlocked large sums for highways, rail and sanitation, and logistics occupancy has tightened in major cities to multiyear lows. Northern border states in another country show fast industrial expansion, with industrial construction permits rising sharply in recent years.
Where growth is expected by segment
The building construction segment was the largest in 2024 with nearly 58.3% of the market share. Land planning and development is projected to grow faster, with one forecast listing a 7.4% CAGR for that segment. The private sector was the largest market segment in 2024 while public-sector spending is expected to expand at roughly 6.8% CAGR. Large contractors held a majority share in 2024, but small contractors are forecast to grow quickly, with one projection showing an 8.1% CAGR for small firms.
Headwinds: costs, skills and climate
Key constraints include volatile material prices, high logistics costs, long permitting cycles and a widespread shortfall of trained workers. In some countries more than 60% of construction materials are imported, and logistics costs across the region are notably higher than in other manufacturing hubs. Informal work is widespread, with more than half of construction workers operating outside formal systems in parts of the region, limiting training and safety. One training body projects a large shortfall of technicians in the coming years, while secondary enrollment in technical programs remains low.
Climate and natural hazards add risk. Many assets sit in high‑risk zones where earthquakes, storms and floods are common. Only a minority of countries have comprehensive climate‑resilient building codes today, increasing exposure for new projects and raising financing requirements.
How the industry is adapting
Builders and funders are turning to several solutions: more pre‑construction planning to cut costs, public–private partnerships to leverage private capital, wider adoption of digital tools such as Building Information Modeling and digital twins to reduce rework, and greater use of prefabrication. Sustainability is rising on company agendas, with green building standards, low‑emission materials and renewable energy plant construction highlighted as growth enablers. Smart‑city projects that combine biophilic design, AI and intelligent systems are also part of new masterplans in selected locations.
Legal and project delivery issues
Disputes over cost overruns, delays and social interruptions remain common. Arbitration has become a frequent way to resolve cross‑border and large project disputes, while smaller domestic disputes often remain in national courts. Project owners and contractors are urged to strengthen contracts, use early dispute boards and maintain thorough records to reduce delays and litigation risk.
Bottom line
Latin America’s construction outlook blends strong demand from rapid urbanization and public infrastructure programs with clear operational and financial risks. The region will likely see steady activity where public plans and private finance converge, while the real challenge will be scaling skilled labor, cutting material and logistics inefficiencies, and building with resilience to climate threats.
FAQ
How can the market reports show such different totals?
Reports use different base definitions, datasets, and timelines. One report may focus on certain construction categories and countries or use conservative valuation methods, while another may include broader activities and longer forecast windows. Differences in reported CAGRs can come from varying forecast periods and methodologies.
What are the main growth drivers for construction in the region?
Main drivers include rising urban populations, national infrastructure modernization programs, increasing private investment in housing and industry, and a growing focus on renewable energy and green buildings.
What are the biggest risks for projects?
Key risks are material price volatility, high logistics costs, permitting delays, labor shortages, and climate-related hazards that can damage assets and raise insurance and design costs.
How are firms responding to skills gaps and cost pressures?
Responses include more pre‑construction planning, workforce upskilling programs, adopting modular construction and digital tools, and forming strategic partnerships to share risk and expertise.
Is sustainability becoming central to projects?
Yes. Green building practices, energy efficiency standards, low‑emission materials, and climate‑resilient design are becoming more common, often driven by policy and financing requirements.
Key features at a glance
| Feature | Detail |
|---|---|
| 2024 market estimates | USD 1.07 billion (one study) and USD 9.11 billion (second study) |
| Forecasts | USD 1.64 billion by 2033 (first study); USD 13.75 billion by 2034 (second study) |
| Top growth drivers | Urban demand, infrastructure investment, renewables and green buildings |
| Main risks | Material & logistics cost pressure, skills shortages, permitting delays, and climate risks |
| Public investment | Large national programs and multilateral commitments; noted public plans include multi‑billion dollar road and rail investments |
| Market structure | Building construction largest segment; private sector dominant; large contractors lead but small contractors growing fast |
| Technology and methods | BIM, digital twins, prefabrication, AI and smart‑city design |
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 TX News
TEXAS STAFF WRITER The TEXAS STAFF WRITER represents the experienced team at constructiontxnews.com, your go-to source for actionable local news and information in Texas 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 Texas Construction Expo, major infrastructure unveilings, and advancements in construction technology showcases. Our coverage extends to key organizations like the Associated General Contractors of Texas and the Texas Building Branch, plus leading businesses in construction and real estate that power the local economy such as Austin Commercial and CMiC Global. As part of the broader network, including constructioncanews.com, constructionnynews.com, and constructionflnews.com, we provide comprehensive, credible insights into the dynamic construction landscape across multiple states.
