On Tuesday morning, the first plenary session of Panama's Mesa Tripartita para la Dinamización del Sector Construcción convened at the National Assembly, La Estrella reported. The headline statistic behind that meeting is straightforward: permits issued in Q1 2026 rose 36.3% year-over-year, but the sector remains 44.1% below where it stood in Q1 2023, according to CAPAC, the country's construction chamber. For a country whose construction industry has historically driven national development, that gap is the story.
Three quarters of a recovery, off a much smaller base
The Cámara Panameña de la Construcción, the industry body that has driven the tripartite agenda, published a sequence that explains why the recovery feels slow even as the numbers tick upward. Q1 2023 was the peak: an 80.4% expansion year-over-year. Q1 2024 collapsed to -34.5%. Q1 2025 essentially stood still at -0.4%. Q1 2026 has reversed direction with the 36.3% jump in permits, but the absolute base is still well under half what it was three years earlier.
In practical terms, a sector that grew at speed through most of the prior decade lost roughly two-thirds of its momentum across 2024 and 2025, and is now expanding off a substantially diminished base. A 36% jump in Q1 2026 closes only a small portion of the gap.
What the tripartite table is actually trying to fix
The mesa, installed at the National Assembly on May 13 and convened in its first plenary on May 19, brings together CAPAC, labor representatives, deputies, and vice ministers from the Ministry of Economy and Finance. CAPAC's published agenda lists six focus areas: permitting procedures, public contracting, housing, financing, banking, and insurance. The breadth tells you something. The bottlenecks the industry identifies are distributed across the entire chain of getting a building from drawing board to occupancy permit, not concentrated in any single chokepoint.
Two of those six areas — financing and banking — sit upstream of any project starting at all. The other four govern whether a project that does start can actually complete on time. For an industry whose business model depends on continuous project pipelines, both ends of the chain matter.
What this means for metropolitan Panama City supply
Panama City's residential supply pipeline — particularly in the high-rise corridors of Punta Pacífica, Costa del Este, Avenida Balboa, and the redeveloping Marbella and Obarrio belt — depends on a small number of large vertical projects entering the market in narrow delivery windows. When the sector operates at roughly half its 2023 capacity for two consecutive years, three follow-on effects show up, typically with a one to two-year lag, in those neighborhoods specifically.
The first is fewer new launches reaching market in 2026 and 2027 than the absorption curve would otherwise support. The buyer-facing version of this is shrinking inventory at the higher end of new construction and slower delivery on units already sold off-plan.
The second is a wider spread between asking and closing prices in resale, because resale supply has to absorb demand that new construction cannot meet quickly. That spread tends to favor sellers in the short term and complicates valuation for foreign buyers using comparable-sales models that assume a normal new-construction inflow.
The third — less visible but more durable — is concentrated labor. When construction firms operate below capacity for sustained periods, they shed skilled tradespeople. Bringing those workers back when projects return takes time, and the cost of that recovery is generally paid by the buyer of the units delivered late.
The fiscal multiplier behind the urgency
The reason a National Assembly–hosted tripartite table convenes for construction specifically — rather than for any other industry — comes through in the multiplier numbers CAPAC has been circulating. Each balboa spent in construction generates, by CAPAC's published estimate, B/.2.34 in downstream GDP and B/.0.24 in tax revenue. The chamber also points to a public investment pipeline of over B/.11 billion in infrastructure projects waiting to break ground.
The sector's claim to political attention rests on those second-order effects. When construction contracts, the public finance side feels it before the housing side does, and the labor side feels it before either. That dynamic — not the price of an apartment in Marbella — is what drives a tripartite table.
Today we see positive signals and modest activity growth, yet remain far from 2023 sector levels.
CAPAC president Irene Orillac de Simone framed the moment carefully in a May 12 statement accompanying the chamber's headline figures. The phrasing — positive signals, modest activity, far from 2023 — is roughly the consensus framing inside the industry now.
The banking signal sitting alongside this
On the same morning the tripartite table opened, Fitch raised Banesco Panamá's long-term national rating to A+(pan) with a stable outlook — the highest rating the bank has held since beginning operations in Panama nineteen years ago. The two stories sit alongside each other for a reason. A rating upgrade of one of the country's larger commercial banks signals improved confidence in the funding side of the economy.
For construction recovery, the financing rail is where the practical question lives: at what rate, on what timeline, and for what loan-to-cost ratio is capital available to restart paused projects. Bank ratings do not translate directly into mortgage rates, but they correlate with the cost of bank-side funding, which sits underneath every dollar of project finance and end-buyer mortgage credit in metro Panama City.
What to watch from here
The tripartite table will report through technical sub-committees on each of the six focus areas. The two that matter most for the metro Panama City supply curve are housing — where any change to subsidy structure or public-housing finance would reshape the volume of mid-market product entering the market — and permitting procedures, where the choke point on a Punta Pacífica or Costa del Este tower today is more often regulatory throughput than capital or land.
Three concrete numbers to track in the next six months. The permit growth rate of Q2 2026 — whether the 36.3% Q1 figure is sustained or was front-loaded. The share of Panama's eleven-billion-balboa public infrastructure pipeline that actually disburses by year-end. And any change to housing-financing terms emerging from the tripartite recommendations, which would translate fastest into the mid-market segment that anchors much of metro Panama City's residential pipeline.
The honest read for a foreign buyer evaluating metro Panama City in 2026 is this. The supply correction underway since 2023 has not yet washed through. Inventory at the new-construction high end is tighter than at any point in the prior business cycle, and the pipeline that would normalize it is still rebuilding from a sustained slump. Whether the tripartite table accelerates that rebuild or simply documents the bottlenecks will become visible in the permit and project-start data of the next two quarters — not in the meeting itself.
