VIDEO: The construction boom in Brazil

Steel First’s Latin America editor Juan Weik takes a look at the booming construction industry in Brazil, which has been stimulating long steel consumption in the country.

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A strong and stable economy in Brazil over the past decade has been stimulating the construction industry.

Millions of Brazilians can now buy their own home for the first time ever. [And] with housing and infrastructure projects run by the government and works related to the World Soccer Cup in 2014 and the Olympic Games in 2016, the local economy is set to remain in good shape.

Long steel products have been selling very well in Brazil. Gerdau, the biggest producer in all the Americas, sold more than seven million tonnes of steel last year [in Brazil alone].

The company said that a boom in civil construction was the main reason behind the good results in Brazil. This is not hard to see [as] even in a huge city like São Paulo, which seems to have no more space for new buildings, construction has been strong.

According to Sinduscon São Paulo, the largest association of construction companies in Brazil, the construction sector in the whole country increased 4.8% in 2011. This followed a lift of more than 15% in 2010, [which was] an all-time record. For 2012, the association forecasts a 5.2% rise.

Sinduscon’s director of economics, Eduardo Zaidan, said: “Civil construction absorbs 45% of the investment made in the Brazilian economy, so if there is investment, civil construction works – and there has been public and private investment.

“We forecast that the coming years of the Brazilian economy will be very favorable to civil construction, even if there is not a spectacular growth of the local economy.”

All this activity will mean more long steel consumption in Brazil.

“We can surely say that, if there is movement in civil construction there will be higher production, higher sales and higher consumption of long steel,” Zaidan added.