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August 14, 2020updated 17 Mar 2022 5:27am

Panama’s construction sector to contract by 6% in 2020, says GlobalData

By GlobalData

On 11 August, Panama’s government announced it will allow work to resume on various construction projects and let more businesses reopen from 17 August, including retail stores, car dealers, beauty salons, and barber shops as part of its plan to gradually kickstart its economy.

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Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
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  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
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by GlobalData
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The announcement, which was made by the Ministry of Health, Luis Sucre, came after a recent study revealed that the reproduction rate of Covid-19 in the country had dropped from 1.13 to 1.07 and the capacity of the healthcare system had increased.

Mr Sucre said that the government has granted permits for a total of 84 construction projects to restart operations, of which 69 are public works and the remaining 15 belongs to the private sector. Public projects include the construction of the Sixaola binational bridge between Panama and Costa Rica, the Toabré wind farm, the rehabilitation of the Bridge of the Americas that connects metro line two to the Tocumen airport, the expansion of the Arraiján-La Chorrera highway, the repair of the railway bridge over the Chagres river, the Tocumen airport expansion, the construction of the Pedregal-Gonzalillo highway and the rehabilitation of the trans-isthmic highway from Plaza Ágora to San Isidro.

Among the private investment projects are the Hospital Pacifica Salud in Costa del Este, the PH San Roque project and the Colegio Panamá in Costa Sur, and the Pacific Center.

But while the resumption of these works is expected to provide a boost to the sector and the wider economy in the second half of the year as the government authorises more permits for construction works and ease further restrictions, construction output will not return to its pre-pandemic levels until 2022.

GlobalData expects Panama’s construction sector to fall by 6% in 2020, following an increase of just 0.1% in 2019. However, a further downward revision is likely if a second wave of infections materialise and the government will be forced to slow or reverse its reopening plan. Before the pandemic, GlobalData expected the sector to recover to 5.3% in 2020 but given the stringent measures imposed by the government to control the spread of the virus, including shutting down all construction works since 21 March, the sector is expected to be severely hit this year.

Panama’s construction sector, which accounts for about 15% of the country’s economy and is the third largest generator of employment in the country, was already weakening before the pandemic started due to major strikes by construction workers of the Panama Canal project, which began in April 2018 and extended well into 2019.

According to the National Institute of Statistics and Census (INEC), construction activity fell by annual rate of 6.9% in the first quarter of 2020, after declining by 4.2% and 2.6% in the previous two quarters. Construction activity is estimated to have dropped sharply in the second quarter, in line with the steep decline in economic activity.

Latest data from INEC also showed that the Monthly Index of Economic Activity (IMAE) fell by 40.9% in May, following a contraction of 34.7% in April, with construction along with other key sectors, such as hotels, restaurants, air passenger transport, trade, manufacturing and mining, significantly contributing to the decline in economic activity.

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Free Report
img

Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
  • IoT value chain
  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
Don’t get left behind – find out how IoT can fortify your operations and make investments now.
by GlobalData
Enter your details here to receive your free Report.

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