This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/24/2018
Overview
After years of low growth in the market and imports of equipment, this sector is projected to grow by 2.4% in 2018, according to the Chilean Chamber of Construction (Cámara Chilena de la Construcción, CChC).  Moreover, the sector should continue to grow in the coming years.  

The slowdown over the last four years has impacted investment in infrastructure and importation, which means that maintenance and improvement are now required. New infrastructure investment is projected at $174.5 billion (2018-2027) covering three main areas:
1.             Base Infrastructure:  Water resources; Energy; Telecommunications
2.             Logistics Infrastructure:  Inter-urban roads; Urban roads/bridges; Airports; Ports; Railway roads; Logistics
3.             Social Use Infrastructure:  Public Spaces; Hospitals; Jails; Education

All the above mentioned will require intense use of construction machinery and equipment.    

Infrastructure projects are financed with direct state investment and public/private partnerships.  The country has a large portfolio of outstanding infrastructure projects.  Major investment for the 2018-2027 period include:  urban roads and highways ($60 billion); telecommunications, including the expansion of fiber optic networks, and coverage of remote areas ($25.3 billion); and water transportation and storage ($18.3 billion). Included in these figures, the Ministry of Public Works announced $14.6 billion in infrastructure concessions for 60 projects from 2018-2023, including 24 road projects, 18 hospitals, seven airports, and two dams.

Imports of construction machinery and equipment decreased by 2% between 2016 and 2017 but is expected to grow during 2018.   The U.S. has long been the largest supplier of construction machinery and equipment in Chile, and despite contraction in the sector, imports increased by 13.5% from 2016 to 2017.  The U.S. leads in such products as heavy machinery, high-tech building materials, and capital equipment. The U.S. is followed by China, Germany, and Japan in this sector. 

Building materials from the U.S. have a strong reputation and are in demand, but U.S. companies must be aware that the market is small and very competitive.   Construction standards, especially related to insulation, energy efficiency, and sustainability have been increased, including housing thermal requirements.  The high cost of energy increases market demand for energy-efficient materials in construction projects.  

In 2017, the Dutch consulting firm Arcadis ranked Santiago as the number one most sustainable city in South America, and number 27 in the world.  Chile has 183 LEED-certified buildings, and 418 total LEED activities (including certified and ongoing projects).  Chile has a high public consciousness of sustainable practices and support for investment in green infrastructure, engineering, and construction.    In 2016, Chile started a National Program for Sustainable Production and Consumption, which aims to foster incorporate sustainable construction into inter-Agency objectives.  The program involves the ministries of Public Works, Housing and Urban Development, Energy, Environment, Mining, Health, Economy, Finance, and Agriculture.

Highway and road capacity is extremely low in several regions throughout the country, which becomes especially evident during high tourism season.  A total of 53 identified regional projects are to be constructed in the next 10 to 14 years, with a total investment of about $8 billion, including general road works, international and local highways, and smaller connecting roads between cities.  The country’s strong international trade, of which 96% is transferred through ports and distributed in country through its road/highway system, requires improvement of transfer capacity and logistic services.  Projections indicate that the country’s port capacity will become saturated by 2020. 

Opportunities will exist with the $3.2 billion San Antonio megaport expansion project, which is slated to begin construction in 2021. The project currently in the environmental permitting phase and is also subject to the Chilean Federal Trade Commission approval. The port of Valparaíso also potentially has a smaller expansion project, which is subject to numerous environmental and municipal approvals.
 
 2015201620172018 (Estimated)
Total Local Production110.0110.0110.0115.0
Total Exports70.792.372.893.0
Total Imports806.3685.5671.8700.0
Imports from the U.S.
 
290.5170.3196.8200.0
Total Market Size845.6703.2709.0722.0
Exchange Rates: 1 USD654677649640
(total market size = (total local production + imports) - exports)
Units: Millions of USD
Source: Chilean Customs


Leading Sub-Sectors
Chile manufactures very limited and basic types of construction equipment, mostly for use in the mining sector.  The vast majority of equipment is imported, and U.S.-made products are highly regarded by Chilean buyers.  However, Chinese equipment has consistently increased its presence in Chile in recent years. 

Energy Efficient Machinery
The best opportunities for U.S. exports are for those products that offer high levels of efficiency, and that can work on reduced operational costs, replacing expensive labor.   Since the cost of energy in Chile is very high, energy-efficient machinery is an excellent sales advantage.  The greatest demand for energy-efficient machinery can be found in areas such as earth moving equipment, concrete technology for high-rise building construction (scaffolding, concrete pumps), and supplies and consumables that accelerate the building process. 

Building Materials
Building materials used in green building enjoy strong prospects, especially those that add points for LEED and other certification.  ‘Green’ and ‘sustainable’ are trendy terms within the Chilean construction sector.  Insulation products, heating systems, and air conditioning systems are in high demand for new construction projects.  The local market is open to new and high-tech products, but it is a small and very competitive marketplace. 

Opportunities
  • Public Works, Infrastructure:  highways, airports, ports, hospitals, etc.
  • Mining, energy & general industry related construction
  • Private buildings (offices, hotels, first & second homes, lake and beach resorts)
  • Retail, especially shopping malls
  • Educational and private health facilities
  • Industrial facilities
EXPO EDIFICA / CONEXPO Latin America / Expo Hormigón will take place in Santiago at Espacio Riesco from October 2-5, 2019.

The local trade shows Expo Edifica and Expo Hormigón will co-locate with the U.S.-based Association of Equipment Manufacturers (AEM) Conexpo Latin America, for the second time in Chile.  This event brings together the most important players in the construction sector.

For more information, please visit:  www.edifica.cl.

Web Resources
  • Ministry of Public Works, Ministerio de Obras Públicas: www.mop.cl
  • Ministry of Housing and Urbanism, Ministerio de Vivienda y Urbanismo: www.minvu.cl
  • Cámara Chilena de la Construcción, CChC, Chilean Chamber of Construction: www.cchc.cl
  • Corporación de Desarrollo Tecnológico, Cámara Chilena de la Construcción, Technology Development Corporation (part of CChC): www.dct.cl
  • Instituto del Cemento y del Hormigón, Institute of Cement and Concrete: www.ich.cl
  • Asociación de Empresas Consultoras de Ingeniería, AIC, Association of Engineering Consultants: www.aic.cl
  • Asociación de Oficinas de Arquitectura, AOA, Association of Architecture Firms: www.aoa.cl
  • Greenbuild Chile, GBC: www.chilegbc.cl
For additional information, please contact CS Santiago Commercial Specialist  Mary Lathrop Mary.Lathrop@trade.gov.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Chile Design and Construction Trade Development and Promotion