Leaders of the construction industry in Panama are concerned about the difficult situation they are going through which is reflected in the lack of interest by employers in this sector to invest in construction works.
According to the latest report by the Superintendence of Banks of Panama (SBP), construction loans grew at only a 0.8%, going from 45 million 136 thousand 293 dollars in December 2015 to 45 million 501 thousand 944 dollars in February this year, that is, the increase in loans has been only 365 thousand 651 dollars.
Meanwhile, the value of buildings, additions and repairs (investment), according to the Comptroller General, went from 165 thousand 807 million dollars in January 2015 to 161 thousand 31 million dollars in January, reflecting a decrease of 2.9%.
The most significant decline occurred in the value of residential construction, which fell by 6%, since it went from 59 thousand 923 million dollars in the first thirty days of this year to 56 thousand 311 million dollars in the same period of last year.
On the other hand, the non-residential construction fell in January in 1.1% from $105 million 884 thousand in January 2015 to $104 thousand 720 million dollars in January 2016.
These reductions are associated with the affected industry due to the lack of interest of employers to invest in future work.
Elisa Suárez, Executive Director of the National Council of Housing Promoters (Convivienda) noted that for her it is not surprising that loans to the sector construction have decreased.
She added that this occurs as a result of the amount of paperwork that must be completed to obtain the construction permits, a situation that was reported a year ago.
She noted that the construction sector has been losing dynamism and, despite it is still growing, it is not doing so at the same levels as in previous years.
Suarez pointed out that this growth of just 0.8% in construction loans reflects how affected this sector is and perhaps many projects that were under development no longer will be.
She further mentioned that another consequence of the affectation to the building sector can be measured with the decrease in the sale of ready-mix concrete and cement (raw materials for this sector), whose production, according to the Comptroller General, in January shrank to 35.3% and 10.9%, respectively.
The CEO of the National Council of Housing (Convivienda) noted that this decline in loans is also reflected in a decrease in the labor force hired by this sector, which went from 200 thousand workers about four years ago to about 137 thousand in the last year.
In this regard, Iván de Icaza, President of the Panamanian Chamber of Construction (Capac), pointed out that this decline in loans has to do with the slowness in processing construction permits, since disbursement of such credits are given once the works start.
Mr. Icaza said that the authorities should make a reengineering of the processes the companies are asked to follow to obtain these permissions and see which ones are needed and which ones
are not.
The President of Capac urged the authorities to keep up the attractions of a country, so as to maintain the inflow of foreign investment, which in recent years has been over $5,000 million, which has helped the building sector a lot.
Iván Carlucci, Inversiones Natasha Manager and former President of the Panamanian Association of brokers and real estate developers (Acobir) stressed, additionally to that, that builders are being
cautious when it comes to projects, which may reflect on a decline in loans that they request.