Panama - Country Commercial Guide
Building Products

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-10-13

Overview

 

2018

2019

2020

2021 estimated

Total Local Production

$860

$741

$492

$522

Total Exports

0

0

0

0

Total Imports

$1,140

$1,159

$708

$750

Imports from the U.S.

$

$

$

$

Total Market Size

$2,000

$1,900

$1,200

$1,272

Exchange Rates

1:1

1:1

1:1

1:1

U.S. Dollar Millions. (Data Source in Common Data Platform)

Source: Office of the Comptroller General and estimates from industry sources. The U.S. dollar is legal tender.

The construction sector has been a pillar of Panama´s economy. This sector experienced unprecedented growth in the last few decades, peaking during the 2008-2012 period. This growth has been decreasing steadily since 2013 and due to COVID-19 will have a more significant decline. The construction sector’s main drivers are the influx of foreign direct investment, sizeable public infrastructure projects, the government policy of attracting multinational companies to establish regional headquarters, low-interest rates for home buyers, the favorable investment climate, and political stability.

According to reports, the total market size in 2019 was about $1.9 billion. There is some local production, mainly cement, aggregates, and PVC,glass and wood products. The Covid-19 crisis paralyzed the construction industry, and its real impact is unclear for 2020 and beyond.  

Despite this sector’s projected slow growth, building products will continue offering good market opportunities for U.S. exporters. The current government is committed to increasing public investment in social projects such as affordable housing. It is estimated that there is a deficit of 150,000 houses in the country, making construction of low and medium-cost housing one of the administration’s priorities. Additionally, the construction of Line 3 of the Metro System, 4th Electrical Transmission Line, and a potential fourth crossing over the Canal are all multi-million-dollar projects that will create substantial demand for building products.

The U.S. market share of building products was approximately 15% in 2019. Competition from Asian, European, and some Latin American countries like Brazil and Mexico are chipping away at the U.S. market share. Nonetheless, there are market niches that offer excellent market opportunities for U.S. exporters.

Panama’s hot and humid weather presents both opportunity and challenges for U.S. building materials suppliers. In general, most buildings and dwellings are built of cement, cement blocks, and zinc roof. It rains ten months of the year in Panama, making repainting an annual occurrence and a continuous maintenance task.  But unlike the rest of Central America, there are no hurricanes in Panama and a rare number of earthquakes.

Panama´s distribution system for building materials is straightforward.  Large importers also function as wholesalers and retailers.  Do-it-Center and Novey are two large, well-established retail chains with multiple stores in major cities, resembling the Home Depot or Lowe’s Home Improvement. Smaller stores across the country are supplied by the importers/wholesalers.  Appointing a distributor is relatively easy and recommended to secure high market penetration.  The U.S.-Panama Trade Promotion Agreement, which eliminated import tariffs for all building products, give U.S. companies a slight advantage over the stiff competition from Asia, Europe, and South America.  The U.S. dollar is the local currency with no foreign exchange risks.  

Leading Sub-Sectors

The following sub-sectors have the highest potential in Panama:

  • Metal structures and bars (steel, aluminum, and iron)
  • Paints, coatings, and raw materials for paint fabrication
  • Glass and glass products (panels, windows, and doors)
  • Electrical products and fixtures, electrical connectors, lighting fixtures, and wire
  • Plumbing supplies and fixtures, sinks, toilets, and faucets
  • Roofing systems (metal roofing, zinc, clay, and concrete tiles)

Opportunities

  • 3rd Metro line worth $2.6 billion
  • MOP Road maintenance and Constructions Public-Private Projects.
  • 100 Bridges Across The Country

Resources

- Ministry of Public Works (MOP)

- Panama Construction Chamber (CAPAC)

- American Chamber of Commerce in Panama

- Panama Chamber of Commerce

- Sociedad Panameña de Ingenieros y Arquitectos (SPIA)

- PanamaCompra: https://www.panamacompra.gob.pa/Inicio