Dominican Republic Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2020 - 2029

Dominican Republic Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2020 - 2029

The Dominican Republic Construction Market size is estimated at USD 35.47 billion in 2024, and is expected to reach USD 54.36 billion by 2029, growing at a CAGR of greater than 9.81% during the forecast period (2024-2029).

Developments in infrastructure, energy, utilities, and residential construction will support this growth.

Key Highlights

• The growth in the commercial construction sector will be supported by the recovery in the tourism and retail sector. The government's efforts to raise investment in commercial buildings are expected to support growth over the next five years. Indotel, the telecommunications regulator of the Dominican Republic, started a public consultation on a two-year plan for a development project for 2023-24. Public consultation will be conducted until April 6, 2023. The plan includes the infrastructure access component of the project requiring an investment of DOP 80.6 million (USD 1.45 million). It includes two initiatives aimed at improving telecommunications access in rural areas. The Elias Pinha North Mobile Services Project and the Rural Area Telecommunications Services Project. The second initiative involves building and deploying infrastructure funded by Indotel through the Telecom Development Fund (FDT). It is to serve selected communities under the cluster modality. Beneficiaries of this project will receive a Telecommunications Service Grant for 24 months.
• The publisher revised its previous forecast of 5.5% growth to 1% real growth for the Dominican Republic's construction sector this year. Rising construction costs, higher energy costs, rising unemployment, and supply chain disruption brought on by the Russia-Ukraine conflict are all blamed for this downward revision. The value add of the construction sector decreased by 0.4% year over year (YoY) in the second quarter of 2022, the first decline in YoY values since the fourth quarter of 2020, according to the Central Bank of the Dominican Republic (BCRD). The Ministry of Economy, Planning, and Development declared in August 2022 that in the first seven months of 2022, it had approved 308 projects worth a combined DOP 132.9 billion (USD 2.4 billion). In September 2022, the Ministry of Finance presented the parliament with the draft of the 2023 Budget, which included USD 21.6 billion worth of spending. The government plans to spend DOP 275.4 billion (USD 5 billion) on education, DOP 137.8 billion (USD 2.5 billion) on healthcare, DOP 49.6 billion (USD 892 million) on public works and communications, DOP 27.4 billion (USD 492.8 million) on industry, commerce, and MSMEs, DOP 10.7 billion (USD 192.4 million) on tourism, and DOP 3.1 billion (USD 55.8 million) on the energy and mining sectors.

Dominican Republic Construction Market Trends

Rise in commercial construction projects

In the past ten years, the Dominican Republic's economy experienced some of the fastest growth in Latin America and the Caribbean. The same period saw a 24% increase in the hotels, bars, and restaurants industry. A vigorous government vaccination campaign and a rebound in international travel aided it. The fiscal expansion was another factor in growth. Increases in the middle class and a decline in poverty are both results of growth. But it also increased the number of people living in cities. More Dominicans relocated to urban areas in the last 15 years. The country transitioned from being an agricultural society to one dominated by vast metropolitan areas, with an increase in the urban population of 50%. Improvements are required for access to basic goods and services in the areas of education, health, water, and electricity that help increase economic opportunities, increase economic mobility, and protect the population of the poor and vulnerable. Growth sectors still need to support the creation of quality jobs. The population's way of life, particularly that of the more vulnerable, is being impacted by rising inflation rates. End-of-year inflation in 2022 was 7.8% y/y, driven by the impact of supply chain disruptions on global markets and rising transport and food commodity prices.

Increase in Residential construction market in the Dominican Republic

The growth in this sector will be supported by the government's focus on housing development across the country. Demand for new housing is expected to grow in the short and medium term, driven by a low mortgage rate across the country. The rising population and ongoing urbanization are also expected to increase the demand for residential construction over the forecast period. The trend toward sustainable construction is expanding in DR due to growing concerns over accelerating climate change and greater knowledge of how the construction industry contributes to greenhouse gas emissions. Furthermore, top construction firms and regional governments are using sustainable and bio-based building materials to improve the energy efficiency of construction activities. The main trends in the real estate market in the Dominican Republic continue to be the development of important projects in the tourism sector, as well as new projects for the cruise sector after the success story of the Amber Cove project in Puerto Plata. Many well-known international developers continued with multiple projects, some of which are already operational, in the areas of Punta Cana, Bani, Miches, Puerta Plata, Santo Domingo, and the southwest provinces of Pedernales, Barahona, and Peravia – Bani.

Dominican Republic Construction Industry Overview

The market is fragmented and expected to grow during the forecast period due to the increase in construction investments and upcoming major projects in the country. However, the market provides chances for small and medium-sized businesses due to the rising government spending in the industry. During the forecast period, the Dominican Republic construction market includes the potential for expansion, which may increase market competitiveness.

The key players in the Dominican construction market are Constructora Rizek y Asociados SRL, Noval SRL, Contratistas Civiles y Mecanicos SA, Metro Country Club SA, and Paredes y Asociados Constructora, C. por A.

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• The market estimate (ME) sheet in Excel format
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