BMI's Executive Summary

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Peru's construction industry led the growth of the broader economy, as the nation enjoyed strong exports, low inflation and a widening supply of credit. In H107, construction grew 14.4% year-on-year (y-o-y). BMI forecasts the average construction growth rate to remain around 8.3% during the 2008-2012 period.

Peru's economy grew 7.87% y-o-y in the first seven months of 2007. The South American nation's economy expanded 7.56% in 2006 on the back of mining exports and increasing domestic demand. The 2006 growth rate is the highest in the past 11 years. Major multilateral financing agencies are providing loans to Peru to increase infrastructural expenditure. Peru's president announced an investment of US$130bn in the country's basic services by 2011 of which about US$100bn will be allotted by the private sector, while the remaining US$30bn will be spent by the government. Major Peruvian infrastructure projects in progress or planned include the US$10.5bn railroad connecting Brazil's Santos port with Peru's Paita port, the US$3.8bn liquefied natural gas (LNG) plant in Pampa Melchorita, the US$1.6bn Camisea Gas project, a US$830mn pipeline as part of the Gasoducto del Sur project, the US$617mn Muelle Sur terminal at the Callao port and sanitation projects worth US$785mn in Lima, Tumbes, Cajamarca, Huacho, Cuzco and Arequipa.

However, the mineral-trade-reliant economy is vulnerable to fluctuations in global demand and prices. The tender process is fairly cumbersome, and it often takes years to finalise a tender. Labour disputes and industrial unrest at a time of limited supplies lead to anxiety in the metal markets. In an effort to reduce poverty and reach the target set in the country's UN Millennium Development Goals, the government continues to search for the best alternatives to expand services quickly.

A number of investment initiatives taken by the government to improve the infrastructure will be completed in the next three or four years. The government's official estimate for economic growth in 2007 is 7.2% y-o-y. The free trade agreements (FTAs) in the pipeline are expected to open new vistas for the nation's economy. The construction industry is expected to reach a value of US$8.7bn in 2008 and contribute 7.7% to the GDP.

Contents

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Chapter 1 – Industry Trends and Development

Market Overview

Peru's Economy In 2006

Peru's Construction Industry In 2006

Investment Initiatives

Chapter 2 – Key Projects

Transport

Utilities

Residential And Commercial Construction

Table: Peru — Major Infrastructure Projects

Table: Peru — Major Infrastructure Projects (continued)

Chapter 3 – Business Environment

Introduction

Table: Latin America Business Ranking

Business Attractiveness Rankings — Methodology

Regional Overview

Peru: Business Environment Ranking

Economics — Long–term Risk

Politics — Long–term Risk

Construction Growth

Competitive Environment

Anticipated Potential

Chapter 4 – SWOT Analysis

Peru Infrastructure SWOT

Peru Political SWOT

Peru Economic SWOT

Peru Business Environment SWOT

Chapter 5 – Industry Forecast Scenario

Table: Peru Infrastructure Forecast

Risks

Chapter 6 – Macroeconomic Outlook

Table: Economic Activity Indicators

Chapter 7 – Country Snapshot: Peru Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education And Healthcare

Table: Education

Table: Healthcare — Vital Statistics

Table: Healthcare — Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Annum

Chapter 8 – Competitive Landscape

Table: Key Players

Chapter 9 – Company Monitor

Graña y Montero (GyM)

Cosapi

Cementos Lima

Cementos Pacasmayo

Chapter 10 – BMI Forecast Modelling

How we generate our Industry Forecasts

Construction Industry

Sources

Chapter 11 – Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, US$bn

Competitive Landscape for Latin America Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Latin American Infrastructure Sources

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BMI's Latin American Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, Infrastructure industry associations, chambers of commerce and company reports. Information sources include: