The Spanish Are Coming!
Economic and Business Update
From our July 2012 Newsletter
A sagging European economy combined with Panama’s six year growth trend have led a number of large and medium sized Spanish companies to enter the local Panamanian economy. Construction giant SACYR forms a part of the consortium that won the contract for the design and construction of the third set of locks in the Panamanian Canal expansion project and the group Fomento de Construciones will play a major role in another massive project, the Metro. These two projects combined are worth over $5B and have certainly gotten the attention of local businesses back in Spain.
Other industries that have seen an increased Spanish presence in Panama include the water treatment, renewable energy, and telecom sectors.
With all this growth, Panama’s first quarter GDP surged to 10.6%, led in part by a robust mining sector along with strong local demand at both the retail and wholesale levels. According to the Capital Financiero article published on June 25, 2012, strong across the board numbers were reported in the telecom industry, tourism, and agricultural production. The mining sector was up by over 278% from last year fueled by local construction demand for sand and stone along with strong gold exports and mine expansion. Experts expect the final year-end GDP to be somewhere around 6% although government administration figures are pointing to a number closer to 9%. Canal tonnage is also up by over 20% compared to last year along combined with a gain of 7.5% in the wholesale goods sector.
While tourism continues to show gains in the number of visitors to Panama, hotel occupancy is down for the year due mostly to a surge in recent hotel openings and thus an increase in the availability of of hotel rooms. Expect hotel room prices in the city to trend downward in the short term as hotels are forced to stay competitive.