The Guatemalan government's budgetary constraints have resulted in serious delays in payments to construction companies for public infrastructure.
Between January and March progress in the execution of public works was almost nil because of the budget problems facing institutions, preventing them from directing the resources private companies awarded with various infrastructure projects such as roads and bridges.
Contribution to GDP by country: Panama - 17.4%, Honduras - 6.4%, Nicaragua - 5.3%, Costa Rica - 5.1%, El Salvador- 3.0%, Guatemala - 2.8%.
A report by the Regional Organization of Chambers of the Construction Industry in Central America and the Caribbean (Ordecccac) provides figures for the construction sector in 2012 for the countries in the region, as well as projections for 2013 and 2014.
The Guatemalan Association of Construction Contractors has pointed to a weaknesses in procurements by the state.
According to an article in S21.com.gt "... the president of the Guatemalan Association of Construction Contractors (AGCC), Alvaro Mayorga, ... said that while government institutions meet important requirements to make the projects transparent, because they don’t have a planning and design office, the projects lack of quality and their costs are too high".
In the first quarter $123 million were not executed and the contraction will be for more than $430 million in the second quarter.
The drop in tax collections has forced the Guatemalan government to set in motion a plan of austerity regarding public finances. After having prioritized the operational expenses of administrative salaries, this has fundamentally impacted capital investment.
In the first quarter, the municipality of the capital city approved the construction of 243,010 square meters, 69.15% less than during the same period in 2008.
According to a report by the Congressional Committee on the Economy, there were 787,777 meters approved during the first four months of 2008.
Sigloxxi.com reported statements by the president of the Guatemalan Chamber of Construction (CGC), Alvaro Mayorga: "The problems have increased because of credit restrictions from the banking system. They need to take the necessary measures to protect themselves."
Next May 17, the new Eskala Roosevelt shopping center from Eskala Group will open in Mixco.
The shopping center of more than four blocks required an investment of $35 million and it will house (already confirmed) Híper Paiz supermarket, McDonald's, Pollo Campero, G&T Continental Bank and Industrial Bank. Additionally, the shopping center will have an area for medical services, opening one month later, and it will be operated by Grupo Hospitalario.
In January 2009, capital goods imports decreased by 29.3% over the same period the previous year.
During the first month of 2009, there were $ 43.8 million in capital goods imports registered, while there were $203.5 million imported during the same month last year.
An article in Sigloxxi.com detailed the situation: "Just in the import of machinery and industry equipment, telecommunications and construction, the decline was 29%; for transportation it was 33.2% and 13.9% for agriculture, according to Banguat."
Due to the crisis Inmobiliaria MultiProyetos has decided to stop the construction of four commercial centers that were scheduled to begin this year.
Ricardo Gonzalez Diaz-Duran, executive president of the firm which belongs to MultiInversiones Corporation, explained to Sigloxxi.com: "The projects already have the required space and the design and feasibility plans, but we have decided to wait until the economy is reactivated and for local commercial chains to increase their demand for commercial spaces before we begin the construction phase."
Inmobiliaria Spectrum, project developer, based in zone 17 in Guatemala Capital, plans to begin construction in November 2009.
Sigloxxi.com reports: "The opening is scheduled to coincide with the 2010 Christmas season, and will provide direct and indirect jobs to some 1,200 or 1,400 persons.
The commercial center is planned in three phases. The first, which when constructed is estimated to be between 24 and 30 thousand square meters.
The Construction Chamber of Guatemala proposes, among other measures, the reduction of home buying taxes.
The Chamber has also proposed creating a liquidity fund for housing, as well as a guarantee fund that would grant direct subsidies to buyers to reactivate the industry.
The plan also includes the creation of a new procedure to shorten the time needed to obtain a construction permit, as well as replacing the current Value Added Tax (IVA), with 1.5% per transaction tax in home purchases.