Guanacaste Second In
Construction Permits
This Year
As of the end of August,
Guanacaste placed second
to San José out of Costa
Rica’s seven provinces
in the number of
construction permits
rubber-stamped by the
Engineers and Architects
Federated Association (CFIA).
Overall, a total of
6,700,711 new square
meters of construction
have been approved
during 2008 — a 25
percent increase over
the same period last
year.
The only province whose
numbers were down this
year is Puntarenas, but
it’s still in the number
4 spot in the number of
constructions permits
processed, trailing
Alajuela. San José
remains in the top spot.
Of Guanacaste’s
1,171,488 square meters
processed between
January and August, most
correspond to
construction project in
Santa Cruz canton
(414,369), followed by
Liberia canton (276,666)
and Carrillo (237,681).
“This growth surpasses
expectations by the
construction sector,
which has been watching
with worries the real
estate crisis in the
United States, the hike
in petroleum prices and
the increase in the cost
of construction
materials, as well as
the recent
implementation of more
restrictive banking
policies in the Costa
Rican credit sector and
the government’s
announcement that a
period of ‘skinny cows’
is coming, marked by a
slowdown in the
country’s economy,” said
Olman Vargas CFIA
executive director.
Added Vargas: “In
evaluating the behavior
of this sector in recent
years, it’s important to
remember the so-called
construction ‘boom’ that
occurred in 2005 and
2006 with increases of
21 percent and 58
percent, respectively,
with respect to the
previous year. By 2007,
there was moderate
growth of 7 percent.
This means that from a
total of 4,157,293
square meters in 2004,
construction permits
doubled in three years,
reaching 8,465,111
square meters in 2007.”
For this year, CFIA
expected growth no
bigger than 10 percent
compared to 2007, and
was even fearing an
important slowdown in
the sector considering
the ongoing
macroeconomic
conditions. The great
surprise is that, on the
contrary, requests filed
with CFIA show a growth
in square meters of 25
percent compared to
2007.
“When analyzing the
statistics we have in
detail, we see that the
number of registered
permits has fallen, but
some of (the projects)
are of such magnitude
that they have
contributed to growth in
a significant manner,”
Vargas explained. “In
other words, there are
fewer construction
projects, but some of
them are so large that
they sector as a whole
has remained growing. It
can be concluded then
that the so-called
‘mega-projects’ are
keeping the construction
sector dynamic.”
The head of CFIA said
that at the beginning of
2008, construction was
only expected to
increase in the single
digits, due to the
reasons indicated above.
However, by the third
quarter of the year,
such low expectations
have been proven wrong
and, based on the
sector’s behavior
throughout the year, a
similar growth
percentage of about 25
percent is expected to
hold up until the end of
the year. The only
caveat at this moment is
to follow-up on the
requested permits and
see how many of the
projects are actually
erected (typically 92
percent), as such a
number could change
significantly this time
around.
According to CFIA files,
it can be observed that
development hotspots
around the country have
changed. While in the
past two years the most
development was seen on
the coastal regions such
as Guanacaste and
Puntarenas, this year it
has concentrated on the
province capitals and
their suburbs,
particularly in the
province of San Jose and
Alajuela. In the
Caribbean province of
Limon, there’s important
development activity
compared to last year,
despite the fact that
this region remains last
in the
total-square-meters
ranking.
There’s also been
significant growth in
“exonerated”
construction, that is,
projects financed by the
government that don’t
need to pay registration
taxes. This sub-sector
grew by 71 percent
compared to last year.
Half of this type of
projects are in the
provinces of San Jose
and Puntarenas.
Construction financed by
private capital
(non-exonerated) grew by
19 percent. This is
concentrated in San
Jose, with Guanacaste
and Alajuela in second
place.
More than half of
approved projects (in
square meters) are for
residential projects,
followed by commercial
and industrial
construction.
Construction square
meters registered, by
province
January-August 2008
San Jose: 2,006,840
Guanacaste: 1,171,488
Alajuela: 1,080,246
Puntarenas: 939,217
Heredia: 758,513
Cartago: 457,950
Limón: 286,457
Total: 6,700,711
Source: Engineers and
Architects Federated
Association (CFIA) |
