Costa Rica - Construction EquipmentCosta Rica - Construction Equipment
Overview
Table 3: Costa Rica Construction Equipment Manufacturing Data (Millions of U.S. Dollars)
*Total Market Size = (Total Local Production + Total Imports) – (Total Exports); Data Source: Costa Rican Customs Directorate
The world economic downturn in the late 2000’s brought a dramatic halt to a previously flourishing construction sector. In recent years the sector has begun to recover, and estimates project growth in 2020 after a slow period in late 2018 and early 2019
Leading Sub-Sectors
The construction equipment with market potential in Costa Rica includes tractors, backhoes, shovel loaders, asphalt and concrete mixers, and dump trucks. U.S. construction equipment enjoys an excellent reputation in the Costa Rican market due to its high quality, the availability of spare parts, maintenance and repair services through dealerships, competitive pricing, and reliable ocean and air shipping services.
The building materials market has been shifting toward local materials, and imports continue to fall. The higher cost of imported building materials has fueled the increase in local production.
Opportunities
In 2017 there was a marked increase in imported construction equipment. Construction of roads and highways during the pre-electoral period compensated for the decline of residential construction which fell 17% during 2017, resulting in an overall decline of 2.2% last year for the construction sector.
Despite a drop in 2017, the construction industry has been growing at a steady pace. According to the CFIA (The Costa Rican Association of Engineers and Architects), in 2014 the construction industry grew by 8.1%. In 2015, the total area under construction grew 12%. In 2016 construction area increased by 13%, primarily due to residential and commercial increases. The construction sector increased by 10.3% during 2018 supported in private sector construction dynamism. The performance of the sector is expected to continue improving for the remainder of 2019 due to increased government investment mainly in highways and other infrastructure projects taken as priority in the new government administration.
The United States is the second largest supplier of construction equipment to the Costa Rican market. 2018 import figures show that U.S. construction equipment constitutes $19 million of the total $72 million, a 19% market share. For 2019, U.S. imports to Costa Rica are expected to reach $22 million, which will represent a 29% market share. Major third-country competitors are Brazil (30% market share), China (9% market share), Japan, South Korea, Sweden, the U.K., Italy and Germany.
Opportunities exist across a range of residential construction sub-sectors in Costa Rica. 2019 residential construction is projected to increase due to new financing opportunities offered by public and private banks. This will increase the overall performance of the construction sector in Costa Rica. Construction credits have emigrated from U.S. dollar loans to local currency due to the risk of devaluation as result of changes during 2018.
A good opportunity for U.S. companies in Costa Rica is the Expo-Construcción trade fair, which takes place in mid-February every year. The coming 2020 fair will host several international companies, generating both global and regional appeal. For additional information contact Mr. Mauricio Obando at the Chamber of Construction at: camara@construccion.co.cr
Concessions Overview: A Demand Pull-through for Construction Equipment
The Government of Costa Rica uses the Public Works Concession Law for the development of large infrastructure projects. These projects include: roads, highways, bridges, airport modernization, port improvement, rehabilitation of the railroad system, and water-wastewater systems, among other projects. The projects are offered to private local and foreign companies and consortiums through a public bidding process under the BOT (build-operate-transfer) concession scheme, as stipulated in the Public Works Concession Law.
A goal of the Alvarado administration (2018-present) has been to revise the concession law to correct its loopholes in which companies can overcharge the Costa Rican government for design, construction, and operation of different projects. In late 2017 the Costa Rican government issued a new regulation that allows Public- Private Alliances. This is expected to be widely supported, increasing investment in different infrastructure projects.
The Costa Rican Government, with COCESNA (Regional Aviation Authority), has started the process of building a new airport in Orotina, to serve the Greater San Jose Metropolitan Area. Construction was expected to start in 2022. Meanwhile, the government and current Juan Santamaría International (SJO) administrator, AERIS, will invest to improve current infrastructure to facilitate increasing tourism and cargo needs in the main international airport of Costa Rica. New Alvarado administration have changed priority on this project however many sectors like tourism and exporters have stated their concerns to delay this investment.
The concession tender to build a new port in Moin (Limon Province) was issued in 2010. This port project has an estimated total cost of $1 billion, and construction began in 2015. Although the project was granted to the Dutch-based based company APM Terminals, U.S. companies have been able to participate in subcontracts on this project. The new port terminal began operations in February 2019. New initiatives to improve port capabilities have been announced for the Atlantic coast which includes a new cruise terminal for Limón.
The Ministry of Public Works and Transportation has announced that it will be using new public tenders for the construction of several roads. One such project is the planned improvement of the portion of the Pan-American highway from San José to San Ramón. The total cost is $65.7 million. Funding will come from a trust created jointly with Banco de Costa Rica. During May 2019 has been announced changes in the toll collections to allow this trust starting investments.
U.S. Foreign Commercial Service Costa Rica has implemented the Deal Team initiative to help U.S. companies interested in participating in these infrastructure opportunities by providing market intelligence and support to connect with other interested companies and U.S. financial agencies.
Web Resources
Cámara Costarricense de Hoteles (Costa Rican Chamber of Hotels)
Consejo Nacional de Concesiones (National Concessions Council)
Costa Rican Chamber of Construction
Costa Rican Customs Directorate
Ministry of Public Works and Transportation
U.S. Commercial Service Costa Rica
Ricardo Cardona - Senior Commercial Specialist
Email: Ricardo.Cardona@trade.gov
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Table 3: Costa Rica Construction Equipment Manufacturing Data (Millions of U.S. Dollars)
| Year | 2015 | 2016 | 2017 | 2018 | 2019 (estimated) | 2020 (estimated) |
| Total Market Size* | 84 | 82 | 91 | 72 | 79 | 83 |
| Total Local Production | 12 | 13 | 12 | 10 | 12 | 12 |
| Total Exports | 6 | 8 | 7 | 6 | 8 | 8 |
| Total Imports | 78 | 77 | 87 | 68 | 75 | 79 |
| Imports from the U.S. | 27 | 30 | 22 | 19 | 22 | 23 |
The world economic downturn in the late 2000’s brought a dramatic halt to a previously flourishing construction sector. In recent years the sector has begun to recover, and estimates project growth in 2020 after a slow period in late 2018 and early 2019
Leading Sub-Sectors
The construction equipment with market potential in Costa Rica includes tractors, backhoes, shovel loaders, asphalt and concrete mixers, and dump trucks. U.S. construction equipment enjoys an excellent reputation in the Costa Rican market due to its high quality, the availability of spare parts, maintenance and repair services through dealerships, competitive pricing, and reliable ocean and air shipping services.
The building materials market has been shifting toward local materials, and imports continue to fall. The higher cost of imported building materials has fueled the increase in local production.
Opportunities
In 2017 there was a marked increase in imported construction equipment. Construction of roads and highways during the pre-electoral period compensated for the decline of residential construction which fell 17% during 2017, resulting in an overall decline of 2.2% last year for the construction sector.
Despite a drop in 2017, the construction industry has been growing at a steady pace. According to the CFIA (The Costa Rican Association of Engineers and Architects), in 2014 the construction industry grew by 8.1%. In 2015, the total area under construction grew 12%. In 2016 construction area increased by 13%, primarily due to residential and commercial increases. The construction sector increased by 10.3% during 2018 supported in private sector construction dynamism. The performance of the sector is expected to continue improving for the remainder of 2019 due to increased government investment mainly in highways and other infrastructure projects taken as priority in the new government administration.
The United States is the second largest supplier of construction equipment to the Costa Rican market. 2018 import figures show that U.S. construction equipment constitutes $19 million of the total $72 million, a 19% market share. For 2019, U.S. imports to Costa Rica are expected to reach $22 million, which will represent a 29% market share. Major third-country competitors are Brazil (30% market share), China (9% market share), Japan, South Korea, Sweden, the U.K., Italy and Germany.
Opportunities exist across a range of residential construction sub-sectors in Costa Rica. 2019 residential construction is projected to increase due to new financing opportunities offered by public and private banks. This will increase the overall performance of the construction sector in Costa Rica. Construction credits have emigrated from U.S. dollar loans to local currency due to the risk of devaluation as result of changes during 2018.
A good opportunity for U.S. companies in Costa Rica is the Expo-Construcción trade fair, which takes place in mid-February every year. The coming 2020 fair will host several international companies, generating both global and regional appeal. For additional information contact Mr. Mauricio Obando at the Chamber of Construction at: camara@construccion.co.cr
Concessions Overview: A Demand Pull-through for Construction Equipment
The Government of Costa Rica uses the Public Works Concession Law for the development of large infrastructure projects. These projects include: roads, highways, bridges, airport modernization, port improvement, rehabilitation of the railroad system, and water-wastewater systems, among other projects. The projects are offered to private local and foreign companies and consortiums through a public bidding process under the BOT (build-operate-transfer) concession scheme, as stipulated in the Public Works Concession Law.
A goal of the Alvarado administration (2018-present) has been to revise the concession law to correct its loopholes in which companies can overcharge the Costa Rican government for design, construction, and operation of different projects. In late 2017 the Costa Rican government issued a new regulation that allows Public- Private Alliances. This is expected to be widely supported, increasing investment in different infrastructure projects.
The Costa Rican Government, with COCESNA (Regional Aviation Authority), has started the process of building a new airport in Orotina, to serve the Greater San Jose Metropolitan Area. Construction was expected to start in 2022. Meanwhile, the government and current Juan Santamaría International (SJO) administrator, AERIS, will invest to improve current infrastructure to facilitate increasing tourism and cargo needs in the main international airport of Costa Rica. New Alvarado administration have changed priority on this project however many sectors like tourism and exporters have stated their concerns to delay this investment.
The concession tender to build a new port in Moin (Limon Province) was issued in 2010. This port project has an estimated total cost of $1 billion, and construction began in 2015. Although the project was granted to the Dutch-based based company APM Terminals, U.S. companies have been able to participate in subcontracts on this project. The new port terminal began operations in February 2019. New initiatives to improve port capabilities have been announced for the Atlantic coast which includes a new cruise terminal for Limón.
The Ministry of Public Works and Transportation has announced that it will be using new public tenders for the construction of several roads. One such project is the planned improvement of the portion of the Pan-American highway from San José to San Ramón. The total cost is $65.7 million. Funding will come from a trust created jointly with Banco de Costa Rica. During May 2019 has been announced changes in the toll collections to allow this trust starting investments.
U.S. Foreign Commercial Service Costa Rica has implemented the Deal Team initiative to help U.S. companies interested in participating in these infrastructure opportunities by providing market intelligence and support to connect with other interested companies and U.S. financial agencies.
Web Resources
Cámara Costarricense de Hoteles (Costa Rican Chamber of Hotels)
Consejo Nacional de Concesiones (National Concessions Council)
Costa Rican Chamber of Construction
Costa Rican Customs Directorate
Ministry of Public Works and Transportation
U.S. Commercial Service Costa Rica
Ricardo Cardona - Senior Commercial Specialist
Email: Ricardo.Cardona@trade.gov
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.