Cement caught up with permits
In the first quarter of 2026, Panama’s building permits rose 36% while cement output fell 38% to its lowest since the pandemic, a gap that suggested approved projects were not being built. Seven months in, the gap has closed: cement output is up 10.8% and sales 9.6% year to date, which implies roughly +46% in April–July alone. The recovery is real but incomplete: cement is still about 5% below 2023, and plants run with around 45% idle capacity, says Brax Research.
Cement caught up with permits: after a 38% drop in the first quarter, output is up 11% for January–July.
Change vs the same period of 2025 · Panama · permits (INEC, to April) and cement (INEC, to July, preliminary)
| Indicator | First quarter 2026 | Latest (year to date) | Source |
|---|---|---|---|
| Permit value (INEC) | +36.3% ($301M) | +43.5% to Apr ($417.2M) | nexo.la · La Estrella |
| Permit area, m² (INEC) | +26.1% | +31.7% to Apr | nexo.la · La Estrella |
| Cement production | −37.9% (198k t) | +10.8% to Jul (835,966 t) | nexo.la · La Prensa |
| Cement sales | −35.4% | +9.6% to Jul (744,452 t) | nexo.la · La Prensa |
| Cement production, Apr–Jul only (Brax calc.) | — | ≈ +46% | Brax |
Source: INEC statistics as reported by nexo.la (Q1 permits and cement), La Estrella de Panamá (permits, Jan–Apr) and La Prensa (cement, Jan–Jul, preliminary). The April–July figure is a Brax calculation: Jan–Jul production of 835,966 t minus Q1 production of ~198k t, against the same months of 2025 derived from the two reported growth rates. It rests on rounded percentages and preliminary data; read it as an order of magnitude, not a point estimate.
Image description: diverging horizontal bars, change vs 2025. Permit value +36.3% in Q1 and +43.5% to April. Cement production −37.9% in Q1 and +10.8% to July. Cement sales −35.4% in Q1 and +9.6% to July.
What happened
The nexo.la read of INEC data in May was a warning: Q1 permits were up 36.3% in value ($301M), but cement production had fallen 37.9% to 198,000 tonnes, sales 35.4% and ready-mix 38.9%. Permits measure intent; cement measures what is actually poured. The divergence suggested many approved projects had not started.
Preliminary INEC data published by La Prensa on September 22 changes the picture. Between January and July, cement production reached 835,966 tonnes (+10.8%) and gray cement sales 744,452 tonnes (+9.6%). Since the first quarter was deeply negative, the months after it must have been strongly positive: by Brax’s arithmetic, around +46% for April–July. Permits kept climbing too: +43.5% in value ($417.2M) and +31.7% in area through April.
Cement is within 5% of its 2023 level; permit area is still 36% below it, and the headline gap depends on which measure you pick.
Gap vs the same period of 2023, by indicator · Panama · 2026 vs 2023
| Indicator | Gap vs 2023 | Basis | Source |
|---|---|---|---|
| Cement production, Jan–Jul | −4.7% | 835,966 t (2026) vs 877,500 t (2023) | Brax calc. · La Prensa |
| Permit value, Q1 | −11.2% | $301M vs $339M | nexo.la / INEC |
| Permit area, Q1 | −36.1% | 412k m² vs 645k m² | nexo.la / INEC |
| Capac headline, Q1 | −44.1% | Not specified in coverage; Brax could not reproduce it | Capac via TVN · La Estrella |
Source: Cement: INEC via La Prensa (Jan–Jul 2026 vs 2023), Brax calculation. Permits: INEC via nexo.la (Q1 2026 vs Q1 2023). Capac figure: TVN and La Estrella. Periods differ between cement (7 months) and permits (3 months). Capac’s −44.1% is reported without a stated basis; compounding the yearly changes Capac itself cites (−34.5% in 2024, −0.4% in 2025, +36.3% in 2026) gives about −11%, which matches the INEC value gap, so Brax cannot reproduce −44.1%.
Image description: horizontal bars of gap vs 2023. Cement production Jan–Jul −4.7% (highlighted), permit value Q1 −11.2%, permit area Q1 −36.1%, Capac headline Q1 −44.1%.
Why it matters: the pipeline restarts, and most of it is private
Capital-heavy public works get the headlines, but the cement industry says about 80% of national consumption is private: housing, shopping centres and the services around them. That is a producer’s estimate, not an INEC series, but it matches the permit mix: residential was 58% of Q1 permit value, and $197M of the $301M was in Panama City. When private permits turn into poured concrete, new supply follows.
For a buyer, that is the supply side of every number in our earlier charts. Two years of weak construction suggest thinner deliveries ahead, and a restart means new projects launching in presale, which is why presale terms matter (see our note on presale deposit risk). For a seller of a resale unit, new competing supply can reach the same barrios as demand responds to the new-home ITBI exoneration and the preferential-interest scheme that producers cite as tailwinds.
Two headwinds are on the record: aluminium up 12.7% since March, per nexo.la, and fuel and logistics costs, per Argos.
What comes next
Scenario, not forecast: if monthly cement sales hold near the April–July pace through December, 2026 would close above 2025 but still well under 2023’s roughly 2.1 million tonnes of national consumption at its peak, against about 1.2 million today. The tests are INEC’s August and September releases (does cement keep rising?) and the next permit months (do permits keep outrunning starts?).
Related: Chart of the Week #1: the asking-price mirage and Before the deposit.
Common questions
Is Panama’s construction sector recovering in 2026?
Partly. Permits were up 36.3% in value in Q1 and 43.5% through April. Cement output fell 37.9% in Q1 but is up 10.8% for January–July (INEC, preliminary). Both remain below 2023: cement about 5% below, permit area about 36% below.
Why did cement fall while building permits rose?
Permits measure approvals, cement measures actual construction. In Q1 2026 many approved projects had not yet started pouring. The later data suggests starts picked up between April and July.
How much of Panama’s cement demand is private?
Cementos Bayano’s general manager estimates about 80% of national consumption is private investment (housing, shopping centres, services) and 20% public works. It is an industry estimate, not an official statistic.
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