This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/2/2016

Overview

Construction makes up about 10 percent of the Ecuador’s GDP. The primary investor in the sector is the government with an 80 percent share of total investment; the private sector has a 20 percent share. Over the past several years, the sector has enjoyed exceptional growth largely due to  increased government spending on infrastructure. For the decade prior to 2015, the construction sector had grown at an average annual rate of 7.2 percent since 2004, far surpassing average GDP growth of 4.7 percent for that period.

2015 was a challenging year for the construction industry. In 2015, the sector effectively stagnated due to reductions in government spending, as well as a decrease in bank lending which reduced the availability of residential mortgages. Both of these trends were driven by the dramatic decline in oil prices throughout 2015.

Despite last year’s difficulties, the sector remains a promising prospect for U.S. imports and remains a significant component of the Ecuadorian economy. Moreover, although the sector will not return to the rapid growth that marked the decade ending in 2014, the sector is expected to grow at an average of nearly 4 percent annually between 2016 and 2020.

On April 16, 2016, a 7.8 magnitude earthquake struck the northern coast of Ecuador. The earthquake severely damaged infrastructure along Ecuador’s northwestern coast. Reconstruction projects will be needed including the rebuilding of housing stock, commercial buildings, and roadways.

Sub-Sector Best Prospects

  • New or lower cost materials,
  • Software,
  • Machinery, Equipment, Tools,
  • Construction materials to expedite construction times, panels, gypsum,
  • Green building products,
  • Dividers for office buildings,
  • Elevators,
  • Construction products such as: ceramics, toilets, automatic faucets, value added taps,
  • Automatic doors, floors, paint, roofing, fixtures, efficient lighting, and lamps. 

Opportunities

Apart from earthquake reconstruction, Quito and Guayaquil have the greatest number of residential projects (houses and apartments) in construction. Most residential supply in these cities is in the $70,000 to $150,000 range, with an average area of ​​117 square meters. Over the last five years the total value and the value per square meter of construction has shown a strong upward trend.

There is a market opportunity for lower cost housing projects. The greatest demand is for middle- and lower middle-income housing projects. To target this market the construction sector needs to improve construction processes and optimize resources. Historically, the Ecuadorian construction sector has been slow in implementing cutting edge technologies, preferring instead to rely on  readily available low cost labor. 

Most of the construction machinery and equipment used in Ecuador is imported. Thus, there are opportunities for equipment manufacturers to enter the Ecuadorian market.

Finally, the government has planned several major infrastructure projects, including the Pacific Refinery, Quito Metro, Quito Cables, Porsorja port, Solución vial Guayasamín, and earthquake reconstruction.

Web Resources

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