New market study, "Brazil Infrastructure Report Q2 2015", has been published

We have downgraded our construction industry value growth forecast for 2015 as a result of the ongoing Lava Jato corruption scandal. There is strong potential for infrastructure projects to be impacted by cashflow shortages at contractors and thus we have downgraded growth to 0.2% , with further downside from 2016. Over the longer term the scandal could force a much-needed restructuring of the Brazilian construction sector.

Operation Lava Jato (car wash) - a widespread government investigation into contracting practices at Brazil's national oil company Petrobras - has implicated the construction sector. The investigation started in March 2014 and has initially identified 23 industry groups (including a number of contractors across the energy and construction space) which have been banned from participating in Petrobras contracts pending further investigation.

Key implications of this scandal:

* We expect company cashflow to be hit hard, with the ability to raise financing constrained by the investigation and payment of work done for Petrobras halted. As such, we see the potential for work stoppage at construction sites, loan defaults and bankruptcies. In late March, Galvao Engenharia filed for bankruptcy protection and cited unpaid work as the cause.
* We see the scandal delaying infrastructure projects, in addition to threatening the tendering of projects. The potential for government contracting bans, in addition to the weakened financial position of many domestic companies, raises the risk of limited interest in tenders and thus the potential for delays.
* We have downgraded our 2015 construction industry value forecast to just 0.2%, with further downside. We see downside risk to our forecast from 2016. However, much will depend on the ongoing fallout from the scandal.
* Over the long term, we see the scandal as potentially forcing the government address business environment challenges, which have long preventing international companies from...

Full Report Details at
- http://www.fastmr.com/prod/980219_brazil_infrastructure_report_q2_2015.aspx?afid=301

The Brazil Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.

BMI's Brazil Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Brazilian infrastructure and construction industry.

Key Benefits

About Fast Market Research

Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156 (1.413.485.7001 Int'l)

You may also be interested in these related reports:

- Singapore Infrastructure Report Q2 2015
- Indonesia Infrastructure Report Q2 2015
- Australia Infrastructure Report Q2 2015
- United Kingdom Infrastructure Report Q2 2015
- Hong Kong Infrastructure Report Q2 2015