Panama will reopen its construction industry today following a temporary work suspension that pushed the return past the original July
Panama will reopen its construction industry today following a temporary work suspension that pushed the return past the original July 1 date.
The re-opening will only permit construction of public infrastructure works and has done little to help the hard-hit Panamanian economy, which is projected to experience a 2020 contraction of 3-4%. COVID-19 has cut into Panama Canal revenues as global commerce between Asia and the Americas—which constitutes 44.8% of all trade through the canal—has dropped radically, marking a shift towards regional trade. A deepening of socioeconomic inequalities has mirrored a stark increase in unemployment due to the pandemic, leading some legislators to push for longer-term reform. Leadership has yet to establish a re-opening timeline for lucrative private construction and there are very few projects activated within the second stage of recovery.
The Panamanian economy is predominantly a resource economy driven by three main industries: mining, agriculture and timber. These industries, which received the green light to return to normality in early June, are expected to drive short-term economic recovery as they employ over half the country’s workforce. The delayed construction re-opening and associated limitations to public works may hinder recovery, as contractors will be reluctant to risk investment until the return of private construction, the timeline for which remains unclear. Moreover, experts fear a viral resurgence and subsequent shutdown as the state enters its second phase of re-opening.
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