Industry readies for Martinelli

PANAMA. The Panamanian construction industry is in “top conditions” to face the public infrastructure projects announced by the new administration, according to industry sources.

The construction of the metro in Panama City, one of President Ricardo Martinelli’s top campaign promises, the promotion of popular housing units costing less than $30,000, and the Canal expansion project, are some of the main challenges that the industry will have to face in the next five years.

Spokesmen for Cemex say they are pleased with the president’s decision to promote construction as an initial path to economic recovery.

As a response, they announced that by the end of the year they will have completed plans to expand the local production of clinker, a primary ingredient in the production of cement, to 1,600,000 tones a year four times their current production.

This project is part of a bigger long-term expansion plan by Cemex in Panama, where they will invest approximately $270,000,000.

Its rival, Cemento Panama, has plans of its own. It has recently incorporated into its fleet 25 trucks to carry pre-mixed concrete.

The company is currently expanding its operations, and in the next few months it will be able to increase cement production from 750,000 tones a year, to 1.6 million. They are also planning on increasing sand and gravel production.

For the former president of the Panamanian Construction Chamber (CAPAC), Walter Medrano, the metro project in and of itself will generate from two to three indirect jobs for every person hired. In his judgment, the local industry would be capable of supplying the needs of the public infrastructure projects in the government’s agenda.

“As far as materials, we would only have to import the steel for these projects,” he said.

“As for human resources, the unemployed labor, a product of the decline in new projects in the real estate sector, and the culmination of projects like the Coastal Strip and the Colon-Panama highway, would find employment through these projects, he said.

The INDESA economist Felipe Chapman supports the counter-cyclical measure adopted by the government, where public investment increases as private transactions contract.

Once the economic growth stimulus is achieved through these infrastructure projects, “we should return to fiscal discipline, save, and decrease public debt,” says Chapman,

He acknowledges that another measure could be for the government to spend less and lower taxes, leaving more money in the purses of families and companies, which would “increase demand through consumption and investment.”