business

Construction sees 10 percent drop

Panama has been unable to sustain last year’s record growth in the construction sector.

Revenue from construction-related permits, however, is up sharply from 2007.

Panama's construction industry appears to be slowing down, according to figures from the Contraloría General de la República. The president of the Cámara Panameña de la Construcción, Walter Medrano, said that growth in the construction sector is expected to be 9.8 percent this year, about 10 percent less than in 2007.

But Medrano said that the growth rate is still impressive, and that 2007 was an exceptional year. “You have to take into account that 2007 was the best year that the industry has registered,” Medrano said.

The data is based on revenue the government has received for permits for new construction, renovations and additions. That revenue has increased an average of 57 percent this year, but only because the fees have been raised and the value of real estate, upon which the price of the permit is based, has also gone up.

Medrano said the fact that the industry has continued to grow is a positive sign. “The demand definitely exists, and if there is a commitment to improve the country's infrastructure, this growth can be sustainable,” he said.

The figures show that outlying areas, and especially Arraiján, are experiencing a large jump in fees paid for permits. Mitsila Espino, executive director of Convivienda, said this is a sign that land available for new development in Panama City is limited. As such, developers have had to look to other areas.