Construction remains one of the main strong sectors of the economy in Panama. According to statistics of issued building permits, total value of investments in first three months of 2014 stayed at $ 479.8 million, which is approximately 17.7% higher than the same period of the last year.
According to General Controller of Panama, the permits were mainly issued in the sector of infrastructure and amounted to $ 271.9 million, which also represents an increase of 62.5% compared to the same period last year.
With regard to housing projects, the total amount of investment in the sector during this period amounted to $ 207.8 million, and here we can see a decrease of 13.6% compared to last year.
According to the experts in the construction industry, it will remain strong and continue to grow, despite of the changes in ruling party. The companies still continue to invest in the industry which is the main sign of good state. However, the experts also indicate that the increase in construction costs will push prices for consumers as a result of higher wages. A recent agreement of that was reached between the Construction unions (Suntracs) and the Association of Construction in Panama (CAPAC).
Many experts agree that this wage increase along with the increase in prices of construction materials, and the continued growth in the value of land in the long run, lead to an increase in house prices for the end user, which on average is estimated as 10% per year.
Katrina Shahani, president of the Association of Real Estate Brokers and Developers (Acobir), also noted that indeed higher wages in construction, combined with land scarcity and high prices of materials will affect the final price of any project. In her opinion, one of the key challenges for the new government will be to continue economic growth. Suspension development and completion of many projects in the infrastructure will lead to a large release of labor and an increase in unemployment, so the government would need to work on the further development of the infrastructure.
Also the marketing director of the Shahani Group noticed that the adoption of the new law for multinationals and their further involvement into free trade zones may push the economic development. It is expected that the new ruling party will continue with previous strategy in this matter.
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