Costa Rica Construction Falls By 5%

According to the June 2011 report of the Association of Engineers and Architects (CFIA) the number of square meters registered in the College of Engineers and Architects is 3.6 million, down 5% compared to the same period in 2010.

A CFIA press release discusses building stability during the first half of 2011: “Access to credit, investment in public infrastructure and simplification of procedures are necessary to improve the prospects of the construction sector.”

During the first six months of 2011, the construction sector showed similar behaviour compared to the same period last year, as evidenced by the number of square meters registered by the College of Engineers and Architects (CFIA).

For this period, nearly 3.6 million square meters were counted, accounting for 5% less compared to the same period in 2010. Even with this slight decline it is a more encouraging fact than that observed during the first half of 2009, which coincided with the global economic crisis.”

The observed dynamic does not reach the levels of “boom” construction years, as is clear from the data for 2008. In the immediate future, there is no expected growth in foreign direct investment (FDI) as presented prior to the crisis.

After the fall of foreign direct investment during the crisis of late 2008 and 2009, one sees construction affected in housing (condos, apartments and houses) especially in the coastal region of the Central and North Pacific.

In the first half of 2011, San Jose leads the M2 registration with CFIA, with a total of 1,174,346 square meters. Alajuela, second, recorded 688,041 square meters while in Puntarenas there were 474,782, a figure close to Heredia (422,685 m2). Guanacaste (360,805 m2) is in fifth place on record, followed by Cartago (318,270 m2).

Limon Province, is in tenth place with a total of (158,038 m), thus maintaining the historic tradition of being the province with the lowest value of square meters reported to CFIA.

1. San Jose – 1,174,346M2
2. Alajuela – 688,041M2
3. Puntarenas – 474,782
4. Heredia – 422,685M2
5. Guanancaste – 360,805M2
6. Cartago – 318,270M2

The Guanacaste area presents a particular challenge, having recorded a record number of development plans at CFIA up to 600% (in square meters) in the five years prior to the crisis. This development work focused on housing and tourism. However, during those years, local communities continually requested an equivalent investment in work on public roads, education, health and provision of services.

For CFIA, the decrease in FDI for construction in the North Pacific can be seen as an opportunity for the Central Government and local governments to update infrastructure necessary to serve the existing population.

The type of work, the first semester in the Greater Metropolitan Area (GAM) is concentrated in housing (houses, apartments and condominiums). Among these include the reactivation of the construction process in some projects that had been paralyzed during the crisis, but on a more moderate scope than originally proposed.

For the CFIA, there are under served segments in the construction sector, such as public infrastructure, which can be solved through public-private partnerships, as performed in other countries. In addition, middle-class housing is now a possibility as a new credit market and an already existing demand, which was not being addressed during the past decade.

CFIA considers it essential to improve the competitiveness of the sector, as the context of globalization tends to intensify competition among major cities in the region to attract foreign investment and to host centers of international economic and political decision.

The easing of access to credit by the banking sector, investment in public infrastructure, and the simplification and standardization of procedures to ensure legal certainty for the investor are three factors that could improve prospects for the coming years.

As part of the quest for simplification, CFIA considers the entry in effect in September of the Regulations for the Procedures for Review of Construction Plans as critical. This will benefit the simplification and digitization of construction procedures.

The decree states that the processing of plans will be made through the digital platform of CFIA, entitled “Construction Project Manager” (APC).

With this new system, National Institute of Housing and Urban Development, the Ministry of Health, the Fire Department, Water and Sewer and the CFIA will review one set of documents, through the internet, without requiring the submission of physical plans in any of the institutions.

Registered VIP Members can download the three page Spanish language construction report from the Download Library here.

[custom_script adID=97]

Summarized by Scott Oliver, author of 1. Costa Rica Real Estate Scams & How To Avoid Them, 2. How To Buy Costa Rica Real Estate Without Losing Your Camisa, and 3. Costa Rica’s Guide To Making Money Offshore.

Andrew Makarik

to@welovecostarica.com

Andrew 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.