The construction sector in Costa Rica had registered through October 2017 a fall of 19.92% in relation to the same period of 2016 according to data provided by the Costa Rica Central Bank, institution that has been recording and publishing these data since 2000.
This is the highest contraction registered in the past 17 years in a sector that generates over 136 thousand jobs, equivalent to 6.6% of the total employment in the country; this is also one of the areas where more Nicaraguan labor is employed. At least 25% of the employees in the construction sector are foreigners, and te majority of them are natives of Nicaragua following data from the Costa Rica Construction Chamber (CCC); the CCC doesn’t take into consideration small or informal companies in this sector, which are a considerable number in the country and also provide an important number of jobs.
The Costa Rica Central Bank explains that a decrease in the number of residential projects, little public infrastructure projects, the effects of Nate, and an increase in the number of projects not initiated or paralyzed are the main reasons that explain the contraction. The complications to obtain construction permits specially environmental permits and municipality permits also weigh in.
Another factor that could have an influence in the sector is the upcoming election period since there is no clarity in relation to the economic path the country will take until the new government takes control. Under these circumstances the CCC expects the contraction to maintain through the first semester of 2018.