Market Trends of Panama Facility Management Industry
This section covers the major market trends shaping the Panama Facility Management Market according to our research experts:
Growth in Network Infrastructure to Drive the Market
- Network companies require specialized management of their technical and corporate sites for greater efficiency. Developed network infrastructure is one of the most important aspects for an economy to flourish. Panama is no different. The country is witnessing rampant growth in the networking and telecommunication sector, which will create wide-scale demand for facilities management services. Specialized backup, security, and expansion of corporate offices would require professional contribution for fluent operation.
- The digitalization of businesses through introducing and developing new software will kay the foundation of progressive and long-term growth, attracting more business firms to the country. For instance, in October 2021, Qvantel announced opening a new office in Panama, providing local support for regional customers and engineering support for its regional office in Colombia. The expansion results from increasing demand from communication service providers (CSPs), upgrading legacy BSS (Business Support Software) to digital BSS.
- The expansion of 4G since 2017 till date has reached untouched areas, too, projecting a good number of mobile subscriptions in Panama. The internet penetration rate is rising in Panama, paving the way for firms operating on cloud platforms. As the internet reaches some of the deprived regions in the country, more companies look forward to introducing their products and services. This has and will continue to increase the number of offices and buildings, requiring facilities management.
- The government is also arranging funds for the boost required for developments in network infrastructures in the country. For instance, in March 2021, the CAF-development bank of Latin America lent a loan of USD 350 million to the Panama government for the projects under the Panama Digital plan and the 2020 Digital Agenda. The funds are intended to support the digitalization of the public and private sectors, along with the deployment of connectivity infrastructure and digital inclusion. Such promising financial allocations attract many investors and foreign companies to plan business in the nation.
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Construction Sector to Impact the Market Significantly
- Panama is located 9° North of the Equator and hence, receives rain almost ten months a year. The weather in Panama resembles those of the tropical rainforests. Therefore, the repair works and repainting of the buildings are ongoing opportunities for the construction and facilities management companies to target commercial and residential buildings. The building materials market has contributed significantly to the country's economy.
- The government recognizes the potential and need for improvement in the infrastructure and has taken the necessary steps to push the development in construction. For instance, according to Pana Times, in October 2021, the revision of the general state budget resulted in a total budget accounting for USD 25.3 billion for the fiscal validity of 2022. Out of this, compared to the previous year, the Ministry of Education had an increase of USD 8.4 million, and the Ministry of Public Works had an increase of USD 18.8 million.
- The construction sector has also been recorded to show considerable progress compared to the previous year. Per Panama's National Institute of Statistics and Census (INEC), the construction sector rose by 10.5% year-on-year (YoY) in the initial six months of 2021. Coupled with the growth scenario depicted by the Panama Canal on international trade, many construction companies will be attracted to the country, paving the route for the facilities management companies to play their part in managing the new construction and their office in the country.
- Several multinational companies are entering the market through acquisitions and partnerships to utilize the maritime port advantage Panama has through its Panama canal. For instance, in May 2022, Notarc Administration Group (NMG) acquired the Panama Canal Container Port (PCCP) terminal to continue the construction of the USD 1.4 billion project under its Panama Improvement Fund (PDF) investment. NMG partnered with Terminal Funding Restricted (TIL), an affiliate of Mediterranean Transport Firm (MSC).
- Such developments will continue to invoke the need for facilities management services to facilitate the systematic and efficient utilization of the strategic advantages offered by Panama. The increase in such construction processes throughout the country will attract more multinational facilities services providers, contributing to the overall growth of the trade ecosystem.
