Panamas shrinking job market raising concerns

THE COMPLETION of the Panama Canal expansion project is one of the key factors  leading to  a sharp decrease in job creation in the private sector in the last year.

From March 2015 to March 2016  there was a decrease of 16,370 jobs According to data from the Comptroller General.

Some private sector  representatives point to  a disconnection between the government and private businesses in the establishment of strategies that drive local production.

The Ministry of Labor and Labor Development (Mitradel) attributed the decline to the culmination of several macroprojects of public infrastructure in the country, such as the expansion of the Canal, which employed labor through private contractors who were reducing their labor force as the date of delivery of the work approached.

The statistics generate uneasiness because the private sector currently houses more than 50% of the employed population.

In addition, the private sector creates the highest number of quality and sustainable jobs in the country.

Juan Gabriel González, president of the Panamanian Association of Corporate Executives, links the fall in employment to the impact of the slowdown in economic growth in Panama, which went from 10% and 8% per year to 5.2%.

According to González, another factor that influences the trend is the departure from  Panama of several manufacturing industries.

He says that instead of manufacturing here, companies choose to bring products made from other countries where labor and energy are less expensive, leaving only distributors in the local market.

A sharp reduction in hotel occupancy is also contributing to a shrinking job market, putting stress on  government tax revenue projections