CONSTRUCTION SECTOR CENTRAL AMERICA

FACTS Population July 2009 est. GDP (PPP) per capita 2008 est. Extension Km2 Canadian Investment* (million)(US$)(US$ millions) Guatemala13,34, El Salvador7,27, Costa Rica4,210, Honduras7,84,268112, Nicaragua5,92, Panama3.415,30075, Total * Estimated

Presentation Individual Canadian exports and imports. Sector country highlights. Country imports. Main competitors. Opportunities.

GUATEMALA

Canadian Trade With Guatemala Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

Guatemala imported $ millions of construction materials in A 30% drop compared to the previous year. The International Monetary Fund estimates that the construction sector in Guatemala will start growing again at 2.1% (after a -3.4% drop) by 2010 and will recover quickly its production. Characteristics for the building sector in Guatemala must be taken into account as the country's main type of construction is based on cement/concrete, most buildings are built using those elements together with metal structures and steel beams. Tariffs for most of these products are currently set around 5% and 10%. GUATEMALA CONSTRUCTION SECTOR HIGHLIGHTS

The housing deficit for 2010 is estimated at 1.5 million homes Main exports from Canada to Guatemala are iron and steel, aluminum, medium density fiberboard, laminated flooring (wood), doors and windows (PVC), PVC tubes and pipes, tunnelling machinery, land moving equipment, kitchen cabinets, and other finishing appliances related to architectural design. The highest levels for private investment will be set on housing, construction, industrial and commercial facilities. GUATEMALA CONSTRUCTION SECTOR HIGHLIGHTS

light & heavy construction machinery kitchen and sanitary cabinets and appliances Air condition & ventilation systems flooring systems drywall materials doors and windows (wood and PVC) lighting fixtures intelligent security systems light and medium density fiberboards GUATEMALA CONSTRUCTION SECTOR MAIN IMPORTS

 USA  Chile  Mexico  Germany GUATEMALA CONSTRUCTION SECTOR - MAIN COMPETITORS

 PVC woods and windows  Plywood and veneer – flooring  Engineering machinery  Iron & steel  Furniture GUATEMALA CONSTRUCTION SECTOR OPPORTUNITIES

EL SALVADOR

Canadian Trade With El Salvador Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

El Salvador imported $74.2 millions of construction materials in A 23.2% drop compared to the previous year Increment will be driven by public mega-projects such as Port of La Union, reconstruction of hospitals and roads, private housing projects and tourist facilities. Most notable growth has been in intermediate construction materials, which in the last five years have made up over 4% of all imports. EL SALVADOR CONSTRUCTION SECTOR HIGHLIGHTS

Hospital Network Reconstruction and Refurnishing Project worth US$70 million. Wooden and PVC doors, windows, decorative accents. Low cost ready to assembly furniture and kitchen cabinets. EL SALVADOR CONSTRUCTION SECTOR OPPORTUNITIES

Machinery and equipment Metal and wood materials Generators Electrical equipment furniture Wooden cabinets EL SALVADOR CONSTRUCTION SECTOR MAIN IMPORTS

USA (37.3%) Guatemala (13.6%) Mexico (6.1%) EL SALVADOR CONSTRUCTION SECTOR - MAIN COMPETITORS

COSTA RICA

Canadian Trade With Costa Rica Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

COSTA RICA CONSTRUCTION SECTOR HIGHLIGHTS  Costa Rica imported $302 in construction materials in  The construction sector decreased by –5.1% during.  Direct Foreign Investment in the Construction sector is expected to grow 11.35%.

 Slightly over workers (7%) of the labor force was employed by the construction sector in This amount will increase in 2010 to workers.  Housing represented 41.28% of the total built in 2009, followed by commercial construction with 27.9% and 6.23% in industrial subsector.  Private construction affected the performance of the sector. COSTA RICA CONSTRUCTION SECTOR HIGHLIGHTS

 The Provinces with highest growth in 2009 were San Jose followed by Alajuela and Heredia.  The one with the highest decrease was the Province of Guanacaste.  Foreign direct investment is expected to reach $1.5 billion, However this sum is still significant lower from the $2.3 billion reached in COSTA RICA CONSTRUCTION SECTOR HIGHLIGHTS

Iron & Steel Light construction equipment and machinery Dimensional lumber Kitchen and bathroom cabinets Doors of all types and PVC wndows COSTA RICA CONSTRUCTION SECTOR MAIN IMPORTS Engineered wood products such as OSB, MDF, Particleboard and Plywood Sealant products Concrete additives Flooring and roofing products Bathroom fixtures

USA European Community Brazil Venezuela Chile Mexico Colombia COSTA RICA CONSTRUCTION SECTOR MAIN COMPETITORS

Residential homes and condominiums for second home owners coming from North America. Construction of hotel resorts. Government investment in public infrastructure. Housing. COSTA RICA CONSTRUCTION SECTOR OPPORTUNITIES

COSTA RICA

HONDURAS

Canadian Trade With Honduras Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

The construction industry employs some 10% of the labor force. In terms of m2, last year (2009) the construction sector decreased by - 35%. The residential sub-sector is still the largest representing 57.6% of the total m2 built, followed by the commercial subsector which represented 25.2% a The 2009 national budget was supposed to trigger the development of new infrastructure and building projects, in particular, social housing. However due to the political situation, the objectives were far from being met. HONDURAS CONSTRUCTION SECTOR HIGHLIGHTS

Machinery Light construction equipment and machinery Iron & Steel Doors of all types and PVC windows Engineered wood like OSB, MDF, and Plywood Sealant products Concrete additives Flooring and roofing products Bathtroom fixtures PVC doors and windows HONDURAS CONSTRUCTION SECTOR MAIN IMPORTS

USA European Community (Spain, Germany, Netherlands) Japan Mexico Central American Countries (Guatemala, El Salvador & Costa Rica) HONDURAS CONSTRUCTION SECTOR MAIN COMPETITORS

Public infrastructure -Potable water & waste water projects -Road expansion / rehabilitation -Power generation Residential Housing IFI financed projects Tourism HONDURAS CONSTRUCTION SECTOR OPPORTUNITIES

NICARAGUA

Canadian Trade With Nicaragua Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

In the past three years construction activity has kept a decline in GDP terms. This is a reflection of the slower growth of the economy and the contraction of the Public Sector capital spending. According to the Monthly Index of Economic Activity (IMAE) for the first 2 months in 2009, the residential and industrial construction have experienced the sharpest decline with –26.1% and -79.2% respectevely. Developers are expecting an increase of 40% when compared with 2009, as a result of the coming into effect of a law fostering social housing and millionaire disbursements to banks by the Social Insurance System. NICARAGUA CONSTRUCTION SECTOR HIGHLIGHTS

Iron & Steel Machinery Light construction equipment and machinery Engineered wood like OSB, MDF, Particleboard and Plywood Sealant products Concrete additives Flooring and roofing products Bathtroom fixtures NICARAGUA CONSTRUCTION SECTOR MAIN IMPORTS

USA Mexico Central America (Costa Rica, El Salvador & Guatemala) Venezuela European Community NICARAGUA CONSTRUCTION SECTOR MAIN COMPETITORS

Residential homes Tourism Sector Public infrastructure investment -Potable water & waste water projects -Road expansion / rehabilitation -Power generation IFI financed projects -Prasnica (Water supply rural) -Prasma (Water & sanitation) -Potable water Managua NICARAGUA CONSTRUCTION SECTOR OPPORTUNITIES

PANAMA

Canadian Trade With Panama Millions of CAD$ 2008*2009* Exports Imports * Jan-Nov

About Panama Regional hub and logistic center of the Americas Relatively low inflation and positive economic growth and Stable Political System Panama is a dollar economy International Banking Center, with: Over 70 banks with assets over US$53.4 billion Incentive laws for worldwide corporations

PANAMA CONSTRUCTION SECTOR HIGHLIGHTS Construction activity accounted for 5.7% of GDP in 2008.Construction activity accounted for 5.7% of GDP in Mortgage interest rate: 5.94%.Mortgage interest rate: 5.94%. Direct Investment: US$2.4 billion (2008).Direct Investment: US$2.4 billion (2008). Permits approved in the first 6 months of 2009: US$ millons (US$287 million more than same period in the previous year).Permits approved in the first 6 months of 2009: US$ millons (US$287 million more than same period in the previous year).

PROJECTS UNDER CONSTRUCTION Ocean Reef Islands – US$140 million - Luxury houses will be built between 2011 and Homepage: Panama Canal Expansion project – US$5.2 billion - Design and Construction of the Third Set of Locks (Awarded) - Dry excavations (Awarded) - Homepage:

PROJECTS UNDER CONSTRUCTION Santa Maria & Country Club - US$1 billion - 5, 000 residential units - 18-hole Nicklaus Design golf course - Homepage: Panama Pacifico (Howard) project - US$705 million - 1 million square meters of commercial space - 20,000 residential units - Homepage:

PROJECTS UNDER CONSTRUCTION 22 Resorts, hotels and office buildings - US$570 million Cooper mine project - US$3.5 billion

Infrastructure Projects Announced and in Process Total public investment in the next 5 years: US$12 billion * 2010: US$2.3 billion * 2011: US$2.6 billion  Metro System – US$1 Billion (Approx.)  Coal-burning power plant - US$600 million  Bridges, roads, airports, hydroelectric plants, etc.  Mass transit system in Panama City – US$270 million Source of financing: Fiscal reforms, IDB credit line, US$1billion credit from Brazil.

CONSTRUFER 2010, Guatemala, TBC. EXPO Construcción 2010, Costa Rica, April EXPO Construye 2010, Honduras, TBC. FERCON 2010, Nicaragua, November 5-7. CAPAC Expohabitat 2010, Panama, September BUILDING MATERIALS AND CONSTRUCTION REGIONAL EVENTS

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CONTACT INFORMATION Adolfo Quesada Trade Commissioner, Commercial Section Canadian Embassy in Costa Rica Tel. (506) / Fax. (506) Claudia Hernández Trade Commissioner, Commercial Section Canadian Embassy in Guatemala Tel.(502) / Fax. (502) Romeo Calderón Trade Commissioner, Commercial Section Canadian Embassy in El Salvador Tel. (503) Luis Cedeno Trade Commissioner, Commercial Section Canadian Embassy in Panama Tel. (507)

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