Costa Rica Real Estate – Construction Statistics
Costa Rica Real Estate – Construction Statistics – Statistics suggest negative growth.
Experts don’t doubt that the construction industry reflects a country’s development. The Costa Rica Construction Chamber (CCC) produced data to show that currently 3 million square meters are under construction, representing 4% of the country’s GNP.
The sector employs 110,000 construction workers and even more once projects are
completed in tourism, commerce or industry.
It is causing some concern that for this year’s first quarter some stats are
coming up with negative growth. According to Randall Murillo, executive director
of the CCC, there has been some growth in 2005, but not as marked as 2004. “Although
the figures aren’t going down, growth has been much less and by the end of the
year, the final figures could be the same as last year (reflecting little growth)
or even indicating a slight drop.”
However, the College of Engineers and Architects (CFIA) see the statistics as
buoyant thanks to so-called ‘mega projects’. Olman Vargas of the CFIA affirmed
that;”What’s happening is that a few companies are taking on all the projectsà”
and this means that many investors aren’t seeing this great dynamism through their
normal contracts.
The difference between the figures of both institutions is that CFIA data are
sifted by the CCC, which only considers new construction and some extension works.
The CCC doesn’t take into account electrical, water or sewage projects.
It is, therefore, no surprise that the CCC stats show negative growth for the
first quarter as opposed to CFIA figures showing a 39% growth for the same period.
Both Murillo and Vargas agree that the housing sector, which takes up 67.91%
of the construction industry has been sluggish with only 1% growth over last
year.
The causes.
Firstly, financing difficulties for families to get loans to build their
own houses, explains Murillo. US dollar loans are risky for Costa Ricans because
of devaluation against the colon and it is very hard to get local-currency loans
because of the high repayment conditions and rates demanded by credit organizations.
For the middle classes it is much cheaper to rent a house rather than trying
to build their own home.
A second factor is the present government’s lack of decision about the Free Trade
Agreement (FTA), with many investors and entrepreneurs preferring to wait
for the outcome and see what is going to happen to the country before going ahead
with projects.
“It would be crazy to build a factory to export goods to the United States
if the investor isn’t certain that Costa Rica will go ahead with the FTA”,
says Murillo. On the contrary, that investor may move his business to another
Central American country that has approved the Agreement.
Whilst neither supporting or rejecting the FTA, Murillo states, “We are blindfolded
and don’t know where we are going and it is killing us all – that is what the
statistics are reflecting”.
However, Olman Vargas feels sustained growth trends won’t change in the short
term. This will be determined in the coming weeks when the CFIA publishes its
trade figures for the first six months of this year.
Our thanks to Robert E. Lee and our friends at La Nacion – Costa
Rica’s largest Spanish circulation newspaper for their permission to use
this article…
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Andrew Makarik
to@welovecostarica.comAndrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.
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