Country’s Construction Sector Grows 10%

July 2, 2004

THE construction sector grew 10% inthe first five months of this year comparedto the same period in 2003, according tothe Federated Association of Engineersand Architects (CFIA).However, construction of new housingfell 30% in the same period.“At the beginning of the year there washope we would see an increase. At themost optimistic, hopes were for 5-6%, sothese numbers are very positive,” saidCFIA executive director Olman Vargas.“The greatest concern of the associationwas the increase in the price of constructionmaterials in the beginningmonths of the year, but the statistics showthat despite the increase in price, it has notaffected the sector, yet,” he continued.CONSTRUCTION of the 1.5-milewide,600-foot-high Three Gorges Dam inChina contributed to a steel shortage inCosta Rica at the beginning of the year(TT, Feb. 27). The shortage caused a 40%increase in the price of steel and caused asignificant drop in construction in January,according to the Costa Rican ConstructionChamber.Steel rods are required in constructionof homes and buildings, under the country’sseismic code.Despite the price of steel, constructionin sectors other than housing – industry,commerce, tourism and state works –increased 60% from January to May, comparedto the same period last year, accordingto CFIA statistics. This growth was primarilyin the metropolitan area.THE provinces that experienced themost growth in non-housing constructionwere Heredia and Alajuela with 170% and104% increases, respectively. Non-housingconstruction in Limón and Puntarenasdecreased, by 31% and 3.7% respectively.San José was the only province toexperience a rise in housing construction,growing 6%, compared to the first fivemonths of last year.Vargas attributes the overall 30%decrease of housing construction to financingissues.“IT is easier to rent housing, of a higherquality, with monthly rent, than to getcredit for an amount to build a house,” hesaid. “But there recently has been anaggressive policy on the parts of the banksto generate new methods of financing. Sowe are hoping to see a recuperation in thesecond semester.”

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