With the emergence of the coronavirus and its continued spread across the region, Latin America’s construction output is now expected to contract by 5.5% this year, down from the previously expected decline of 4.1% in April’s update, according to GlobalData, a leading data and analytics company.

Before the COVID-19 pandemic, GlobalData had expected construction output in Latin America to recover to 2.3% in 2020, up from -1.1% in 2019 as construction activity, especially in Brazil, the region’s largest market, was increasing.

Dariana Tani, Economist at GlobalData, comments: “Argentina is set to see the sharpest decline in output this year, declining by 10% in real terms, while output in Mexico and Brazil is expected to fall by 8% and 6%, respectively.

“Slower global demand, plummeting commodity prices, and currency devaluations due to a surge in capital flights, combined with significant drops in tourism and remittance levels and rising unemployment are among the main factors expected to impact the industry in the short term.”

According to the International Monetary Fund, economic activity in Latin America is expected to decline by 5.2% in 2020 amid challenging external conditions and the much-needed lockdown measures to contain the spread of the pandemic.