Decline in Apartment Construction Offset by Increases Elsewhere
The construction of buildings suffered a decline of 22.2% in the fourth quarter of 2009 in the districts of Panama and San Miguelito, compared with the same period last year, according to the Census of Construction of the Comptroller General of the Republic. In the last quarter of last 2009 a total of 784 buildings were built, while in the fourth quarter of 2008 the number was 1,008. What's more, a total of 629 occupancy permits were issued in the fourth quarter of 2009, registering a fall of 38.39% compared to the same period of time in 2008. "At the moment there is little availability of suitable land for construction in the area, and the few that exist are very expensive, which has affected the sector," said Elisa Suarez Gomez, the Executive Director of the National Council of Housing Promoters of Panama. She added that the trend for 2010 with regard to buildings in San Miguelito will remain the same, with a slight tendency towards a decrease.
However, Pedro Detresno, the owner of Pedro's Real Estate, the construction of new buildings in these areas will achieve a recovery towards the end of this year or in the beginning of 2011. He explained that this recovery will be a result of the start of the current government's five year plan which will be pushed further by the ongoing project of the expansion of the Panama Canal.
In this sense Aristides Hernandez, of the consulting firm BDO Panama, said that despite the decline in private sector buildings, the decline this year will be offset by an increase in the construction in the public sector. Among other expectations of the sector a decrease is expected in the construction of high rise buildings and apartments, offset by an increase in the construction of infrastructure, roads, and houses. Detresno said the construction sector is currently directed towards the local market and tourism, unlike past years when the market was directed towards foreign buyers.
During the first quarter of 2010 the amount of construction being accomplished by the Grupo Su Casa increased 15%, according to their Vice President Guillermo Quijano. "Sales of low cost social housing and to the middle class increased significantly, encouraged by the Law of Social Interest, thanks to good levels of liquidity in the banks, and because we expect the prices of materials used in construction to remain stable," said Quijano. (Panama America)
Editor's Comment: Check out this same article as "interpreted" by another online publication. Notice, there is no mention in the original article of the last line. Also, they fail to credit the original source. This article appeared in the Panama America yesterday, 5 June 2010. Now, with that having been clarified, there is no doubt that the construction sector is turning away from apartments and moving towards commercial buildings, infrastructure, roads, and other large scale projects. For example when they talk about projects of "social interest" what they mean is that they are building large numbers of low cost houses for people who make less money. There is a government program which basically provides the profit margin. If I can remember the numbers off of the top of my head I think the builders get $5,000 for each house they can deliver at a price of $21,000 or less, and it has to meet a series of government specifications. Like, so many square meters, so many rooms, on a lot of a certain size, etc. What's more, the construction sector in Panama is looking at the 8,000 jobs they have to fill to build the third set of locks for the expansion of the Panama Canal. And, Panama is about to embark on the construction of a new mass transit project - the Panama Metro - which will cost about $2 billion dollars. All told in the next five years the government of Panama will spend about $17 billion dollars on public sector projects, and the guys who are in the construction business are walking around making tents in their pants - yes, they are happy to see it coming. So, of course there is a decline in permits for highrise apartment buildings, because a whole lot of them have already been built. The main point of this article is that the construction guys are moving on to something else. And that, my friends, is a good and healthy thing for the Panamanian economy in the strategic sense.
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By Zelideth Cortez for La Critica - Good prospects are expected in 2010 for the construction industry, announced the president of the Panamanian Chamber of Construction (CAPAC), Jaime Jované. "Despite the financial crisis we expect to finish out 2009 with a growth (in the construction sector) of between 2% and 3%, and we hope during 2010 we will see even better growth of between 4% and 5%, because the government has an aggressive investment plan," said Jované. He said in order to maximize this growth there should be a National Development Plan, which will turn into a state policy based on clear rules, so the expected growth in the construction sector does not conflict with the quality of life of the population. Jovane thinks with the implementation of the new Vice Minister of Housing and Territorial Development, the government will be able to define and improve many land use regulations for beaches, real estate systems, industrial areas, and to create areas geared toward the growth of the population, among others.
La Critica - The total value of building permits issued through October of 2009 increased by $2 million dollars (0.1%) according to a statistical report issued by the Ministry of Economy and Finance. According to the report the total value of permits for new construction, additions and repairs in Panama was $1.395 billion dollars through October 2009, an increase of $2 million dollars over the same period last year. The statistical report reflects a significant increase in the value of nonresidential construction (69.4%), while simultaneously reflecting a drop in the value of residential construction (21.3%). (Editor's Comment: Wow. New permits worth another $1.3 billion have been issued this year? In spite of the global economic crisis? Clearly, Panama remains a single bright spot among Latin American economies. This is great news.)
By Mabel Cruz R. for the Panama America - Many have opted to seek financing through the Panama Stock Exchange. The construction sector grew 34% in the first half of 2009, compared with same period of last year, according to reports from the Nation's Comptroller. However Superintendent of Banks said fewer disbursements to projects already underway and caution in approving new projects might have a negative impact on 2010. On this issue economist Raul Moreira, President of the College of Economists, said that in order to execute new projects the construction sector is obtaining funding through the Panama Stock Exchange as an alternative method to obtain capital for their work. He explained that if financing is restricted then unemployment will rise, thus causing the same collateral side effect to the banks who rely heavily on consumers who are looking to buy new houses and apartments. Despite this background, Juan Manuel Vasquez, the Director of the Office of Building Construction of the Municipality of Panama, said that through 31 July 2009 their office has granted 971 building permits representing a total investment of approximately $3 billion dollars. These permits, Vasquez said, have been granted for the construction of new buildings, hotels, housing developments as well as modifications to existing structures. Some sectors experiencing a growth in construction are San Francisco, Bella Vista, Juan Diaz and La Cumbres. Data from the National Institute of Statistics (INE) reflects an increase of $287 million in construction spending during the first half of 2009 (a total of $1.112 billion) compared to $835 million in the same period of last year. Juan Manuel Vasquez added that private enterprise has the greatest impact on this sector. 
La Prensa - As of today cars will be able to use two lanes of Ave. Balboa that have been closed since 12 May 2009 when part of the sidewalk and road collapsed due to the failure of a underground retaining wall that was part of the construction of the Star Bay Tower, owned by F&F properties. The engineer in charge of the construction project, Jose Gomez, said the street was repaired and totally stabilized, but since they have not yet finished repairing the sidewalk they have designated two lanes for vehicular traffic and the third lane for pedestrians. "We cannot guarantee that there will be not be any incidents in the area of the street where we worked, but we can certify that we complied with repair design as approved by the authorities," he said. We tried to contact the person who is in charge of overseeing these repairs on the part of the Ministry of Public Works, Jorge Pitalúa, but it was impossible to speak with him. 
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