24/04/2020 Presentation title 1

24/04/2020

Brazil – A country of opportunities

Paulo Safady Simão CBIC Chair

Brazil – A country of opportunities

BRAZILIAN CONSTRUCTION INDUSTRY CHAMBER National and international representative of employer associations in the

construction and real estate industry

BRAZILIAN CONSTRUCTION INDUSTRY CHAMBER

UNIONS, EMPLOYER ASSOCIANTIONS AND CHAMBERS 62 26

Associations States and Federal District Highway Construction Sanitation Real Estate Construction Segments

GENERAL INFORMATION

BRAZIL

Brazil – A country of opportunities

RECENT GLOBAL FINANCIAL CRISIS

“The stability of the economy and of the country’s democratic institutions as well as frank dialogue between government and civil society were decisive in successfully confronting the crisis” A development strategy based on investment and mass consumption (domestic market) was adopted; and ... Monetary policy  Reserve requirement  Reduced interest rates  Foreign trade (reserves) Fiscal policy  Reduced taxes on production  Investments in construction

ECONOMIC OUTLOOK  Economic stability;  Average growth of approximately 4.7% per year;  Growth driven by internal demand and by investments in infrastructure and housing;  Investments projected to grow by at least twice the rate of GDP in the coming 4 years;  Notwithstanding forecasts pointing to a renewed global downturn, domestic demand remains robust, international reserves and reserve requirements are higher than in 2008, and the fiscal situation is stronger.

Source: Ministry of Finance, Brazilian Central Bank (BACEN) and CBIC Database

GDP GROWTH RATES

In the period 2011-2014, the consolidation of investments (driven by construction) and increased domestic demand is expected to spur average annual economic growth of 4,7%.

Source: Brazilian Institute of Geography and Statistics (IBGE). Preparation and estimates by the Ministry of Finance.

MIDDLE CLASS ACCOUNTS FOR MORE THAN HALF OF BRAZILIAN POPULATION DISTRIBUTION OF ECONOMIC CLASSES IN BRAZIL (% POPULATION)

Enhanced income distribution has added 29 million to middle class (Class C).

Note: Monthly household per capita income by class at 2009 prices: Class A/B: more than R$ 4,800.00; Class C: R$ 1,115.00 – R$ 4,800.00; Class D: R$ 804.00 – R$ 1,115.00; Class E: up to R$ 804.00.

Source: Getúlio Vargas Foundation/National Household Sample Survey. Prepared and estimated by the Ministry of Finance

A MIDDLE CLASS NATION COMPOSITION OF BRAZILIAN SOCIAL CLASSES (MILLIONS OF PEOPLE)

Source: Getúlio Vargas Foundation/National Household Sample Survey. Prepared by the Ministry of Finance

BRAZILIAN ECONOMY: FORECAST

* IMF Forecast Source: Brazilian Institute of Geography and Statistics (IBGE). Preparation and estimates by the Ministry of Finance.

GENERAL INFORMATION

CONSTRUCTION

Brazil – A country of opportunities

THE CONSTRUCTION INDUSTRY IN CONTEXT  Represents approximately 20% of national industrial output;  More than 2.8 million formal workers;  More than 170,000 licensed companies;  Accounts for nearly 41% of fixed investments in Brazil.

Source and Preparation: CBIC Database.

GROWTH OF CONSTRUCTION INDUSTRY LABOR FORCE

Source: Annual Registry of Social Information/General Registry of Employed and Unemployed Persons (RAIS/CAGED), Ministry of Labor and Employment. Preparation: CBIC Database.

REAL ESTATE MARKET

Brazil – A country of opportunities

GROWTH IN REAL ESTATE CREDIT 2002 – 2011 (financing volume)

28

REAL ESTATE MARKET

Note: New and used units Source: Brazilian Central Bank (BACEN), Brazilian Association of Real Estate Credit and Savings (ABECIP), and Federal Savings Bank (CEF) – FGTS Channel. CBIC Database.

HIGH QUALITY REAL ESTATE CREDIT Brazilian Savings and Loan System (SBPE) – Agreements with more than 3 outstanding installments signed after 1998 Mortgage Guaranty + Fiduciary Lien

Fiduciary Lien Source: Brazilian Central Bank and Brazilian Association of Real Estate Credit and Savings (ABECIP)

REAL ESTATE FINANCING AS A PERCENTAGE OF GDP

Source: Brazilian Central Bank (BACEN) and Brazilian Association of Real Estate Credit and Savings (ABECIP).

Preparation: CBIC Database

CREDIT TRANSACTIONS BY FINANCIAL SYSTEM IN 2009 (AT THE HEIGHT OF THE CRISIS)

Steering of funds at low cost was decisive for maintaining credit levels at the height of the global crisis.

Source: Brazilian Central Bank (BACEN). Preparation: CBIC Database

MY HOME, MY LIFE PROGRAM (PMCMV) Brazil – A country of opportunities

MY HOME, MY LIFE PROGRAM (PMCMV) Disbursement of MCMV Program (R$ billion)

*Caixa Econômica Federal estimate.

Source: Caixa Econômica Federal. Preparation: Ministry of Finance.

ADDITIONAL GROWTH INDICATORS ...

HOUSING NEEDS (millions of units) 5.81

Cumulative shortage - 2009 23.49

2010 - 2022

Source: Civil Construction Industry Trade Union of São Paulo (SINDUSCON-SP), São Paulo State Federation of Industry (FIESP), Getúlio Vargas Foundation (FGV). CBIC Database.

INFRASTRUCTURE Brazil – A country of opportunities

WHAT IS THE PAC ?

It is a program of consistent investments aimed at meeting the challenges of infrastructure.

GROWTH ACCELERATION PROGRAM SECOND PHASE 2011-2014 Source: PAC2 Report.

GROWTH ACCELERATION PROGRAM – SECOND PHASE (R$ million)

PAC Projects

PAC Better City PAC Citizen Community PAC My Home, My Life PAC Water and Power for Everyone PAC Transportation PAC Energy

TOTAL 2011-2014

57.1

23.0

278.2

30.6

104.5

461.1

955.0

After 2014

4.5

626.9

631.4

Total

57.1

23.0

278.2

30.6

109.0

1.088.5

1.586.4

Source: PAC2 Report.

GROWTH ACCELERATION PROGRAM  Organizes government measures and supports private sector action over a 4 year period.

 Develops an optimal environment to enable the country to grow at a faster rate through the execution of infrastructure studies, projects, and works.

 Creates the conditions for addressing the obstacles to sustainable development.

2014 FIFA WORLD CUP

Urban Mobility Ports and airports

Brazil – A country of opportunities

INVESTMENTS FOR THE 2014 FIFA WORLD CUP (R$ billion)

Source and Preparation: Ministry of Finance.

2016 OLYMPIC GAMES

Urban Mobility Ports and airports

Brazil – A country of opportunities

PORT INVESTMENTS

Nine major projects of ports in the world (US$ billion)

Note

: The expansion of the Port of Santos and the construction of the Açu Port in Rio de Janeiro, the largest venture investiment in port in Latin America.

Source: CG-LA ExameYearbook 2011-2012. Preparation: Ministry of Finance

INVESTMENT PROGRAM IN TRANSPORTATION

Sixteen major transport projects in the world (US$ billion)

Source and Preparation: Ministry of Finance.

INVESTMENT PROGRAM IN TRANSPORTATION

High-speed train linking the cities of Rio de Janeiro, São Paulo and Campinas (R$ billion and % of total)

Source: STN/Ministry of Finance. Preparation: Ministry of Finance

INVESTMENT PROGRAM IN TRANSPORTATION

Airport concession: Planned investments (R$ billion)

Source: STN/Ministry of Finance. Preparation: Ministry of Finance

ENERGY



Subsalt;



Clean Energy;



Hydroelectric Plan;



Oil and Gas.

Brazil – A country of opportunities

INVESTMENTS IN THE OIL AND GAS SECTOR

Ten major projects in the Oil and Gas sectors in the world (US$ billlion)

Note

: If plus ship-oil platforms whith building platforms the total value is US$ 40 billion.

Source and Preparation: Ministry of Finance.

INVESTMENTS IN THE ELETRICITY SECTOR Fifteen major projects in the Eletricity Sector in the world (US$ billlion)

Source: CG-LA ExameYearbook 2011-2012. Preparation: Ministry of Finance

INVESTMENT FOR THE COUNTRY ´ S DEVELOPMENT AND GROWTH

Note: Updated in January 2012. Preparation: Ministry of Finance.

OTHERS BUSINESS OPPORTUNITIES    Investment in

tourism; Commercial buildings

logistics; – shopping malls, warehouses for

Tecnological Innovation Program

BRAZILIAN CONSTRUCTION INDUSTRY CHAMBER

www.cbic.org.br

[email protected]

Phone:

+55(61) 3327-1013

Fax:

+55(61) 3327-1393

24/04/2020 Presentation title 40