Guatemala - Country Commercial Guide
Construction Equipment and Services

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-07-28

At the beginning of 2020, the Central Bank’s prospects for the national economy were optimistic, particularly for the construction sector due to the robust growth recorded 8.3% inter-annual variation in 2019. However, these expectations were not materialized due to health and social distancing measures implemented by the Government of Guatemala to contain the spread of COVID-19 in March 2020.  Even so, the construction sector represented 4.2% of the national GDP in 2020.

These provisions affected the construction sector in different ways, by the interruption of public investments, such as the construction of social housing and public infrastructure, and of private investments, interruptions in the supply of construction materials.  On the demand side, real estate purchase decisions were postponed due to the uncertainty of job stability and debt capacity. 

Even though the activities of the construction sector were strongly affected by the pandemic, it showed a higher level of adaptation and resilience compared to the other countries of the Central American region. According to the Economic Activity Index (IMAE) the Guatemalan construction sector shows a rapid recovery registering in January 2021 a positive inter-annual variation.  According to the Guatemalan Construction Chamber, it is expected that in 2021, construction will grow of 7.5%, due to the expected increase in public investment, allocated for the economic reactivation and reconstruction of infrastructure damaged by tropical storms Eta and Iota. Likewise, it is estimated that the lower uncertainty, both among builders and consumers, will allow the activity of the sector to consolidate its recovery this year through a boost from the construction with private sector funds.  

Opportunities

The construction sector is emerging as one of the engines of the economy in the short term.  The government has set infrastructure development as a key target by focusing on the development of projects that will stimulate the demand for construction materials and services. The government announced a series of priority national development initiatives, of which, according to the Guatemala National Competitiveness Program (PRONACOM),  is expected an increase in investments in the interior of the country focusing on rural infrastructure, housing and logistics. 

These three initiatives have the potential to attract significant amounts of public and private funds to the construction sector in the following years.  Some of these projects include:

Type

Description

Amount

Transport

Subway*

Under evaluation

Railway

Fast Train*

Under evaluation

Railway

Railway Master Plan 2020-2030*

Under evaluation

Highway

Transversal del Sur*

$77m

Highway

Anillo Regional C-50*

$210m

Highway

Belice II Bridge*

$24m

Health

Infrastructure and equipment*

$193.2 loan approved

Port

Quetzal Port Expansion   

$400m

Port

Santo Tomas Port Expansion

$400m

Port

Champerico Port Expansion

$120m

Airport

San Jose Airport Expansion

$60m

Airport

Mundo Maya Int. Airport Expansion

$35m

Airport

Puerto Barrios Airport Expansion

$60m

*Source:  EY Central America Inc.

In addition, the government states that reforms are necessary to the Partnerships for the Development of Economic Infrastructure Law, which promotes public-private partnerships for investment,  and is seeking to implement the law as soon as possible. At present, there are six projects with prefeasibility or feasibility studies completed but not yet tendered.    All together these projects  add the possibility of investing more than $1.5 billion in adequate infrastructure and safe and reliable transportation services and facilitating access to markets and basic social services.

Type

Description

Amount

Airport

Modernization La Aurora International Airport       

$120m

Transport

MetroRiel North – South Guatemala City

$770m

Highway

Puerto Quetzal, Escuintla

$80m

Transport

Mass Public Transportation East – West Guatemala City

Pending

Highway

Interconnection CA-09 North – CA-01 East.

$300m

Building

State Administrative Center in Guatemala City

$250m

Port

Tecún Umán II Intermodal Port

$40m

 

Also, the government is seeking congressional approval for the Development of Road Infrastructure Law  with the goal of extending and increasing the quality of the country’s road infrastructure.  Specifically, increasing the amount of Guatemala’s road infrastrucure  from 16,457 kilometers to 37,952 kilometers in the next 15 years.  

In response to the COVID-19 pandemic, Congress approved a total of $743 million in several loans to strengthen the health services network, to modernize the justice sector infrastructure and to provide road infrastructure investments and maintenance.

Regarding the development of real estate housing projects, it is estimated that the housing deficit in Guatemala is  1.3 million units.  Under current conditions, the housing market only serves 37.5% of the total population. In order to reduce this deficit, the “Preferential Interest for Access to Social Housing Law” has been presented to Congress.   The purpose is promoting the alliance among government, housing developers and financial sector to reduce the interest rate during the first 10 years of the mortgage payment.

Another opportunity in this sector is the supply of raw materials and construction equipment.   According to Import statistics during the year 2020, Guatemala imported $500 million dollars in construction materials, which represents a small decrease compared to 2019 due to the fact that construction activities were strongly affected by the pandemic in 2020.

Events

We recommend the following events to connect with Guatemalan buyers, representatives, and industry officials:

  • Feria Internacional de la Construcción (CONSTRUFER), Guatemala City.  This fair is organized every two years by the Guatemalan Chamber of Construction, CONSTRUFER is chosen by investors in the region to present and launch products, materials, services, machinery, vehicles and technology, as well as to choose distributors.  The next edition is expected to be held on April 2022.
  • ExpoCasa, Guatemala City.  This fair is the largest housing trade show in Guatemala.

Resources

Camara Guatemalteca de la Construccion (Guatemalan Construction Chamber): This organization works to promote the importance of construction in the Guatemalan economy. Upon joining the group, the site provides market indicators about both the economy and the construction industry in addition to a variety of publications about the Chamber, its unions, and the overarching regional construction chamber. 

  • Guatemala National Competitiveness Program (PRONACOM). 
  • Guatemalan Development Foundation  (FUNDESA). 
  • Central American Business Intelligence (CABI). 

Contact Information

Interested parties may contact Commercial Specialist Antonio Prieto at antonio.prieto@trade.gov