• Costa Rica Real Estate

Costa Rica exports down 15 percent in 2015, mostly thanks to Intel exit

January 27, 2016

The total value of export goods from Costa Rica last year fell by nearly 15 percent compared to 2014. However, trade officials attributed the decline to the closure in 2014 of INTEL’s microchip assembly plant, something that’s come to be known as the “Intel effect.”

When excluding sales abroad of electronic components, the decline in exports was just 0.1 percent, the Foreign Trade Ministry (COMEX) reported Monday.

At the same time, the export value of services grew 3 percent over the most recent reporting period.

The report, presented by officials from COMEX and the Foreign Trade Promotion Office (PROCOMER), states that Costa Rica exported a total of $9.6 billion in 2015, down from the $11.3 billion in 2014.

Despite the decline, the final figure is not far off the administration’s 2015 goal of $10.2 billion in exports.

Agricultural exports were also a drag on the year’s final tally, with exports of major products, including milk, bananas and pineapples, showing significant declines.

Sales abroad of milk in 2015 were down by 25 percent, while bananas fell 9 percent and pineapples 7 percent.

Despite the decline, agricultural goods led the country’s sales abroad with 25 percent of the total, followed by medical supplies and components with 23 percent and other food products with 15 percent.

After leading country exports during several years prior to 2014, electronic components now make up 8 percent of the total value of Costa Rican exports.

The medical device sector recorded the greatest growth — 25 percent — representing a $420 million increase in sales. Coffee sales grew 11 percent, fruit juices and concentrates 18 percent and medicines 16 percent.

Minister Alexander Mora put a positive spin on the zero overall growth, saying Costa Rica is experiencing “a very positive change,” from depending mostly on a single product (microchips) from a single company (Intel) to a group of 96 medical supply and device companies that produce many different products. Mora also noted that weather was the main factor affecting agricultural exports last year.

He said export forecasts for 2016 are optimistic as the industrial sector is getting stronger and the Intel effect should disappear by the next report.

COMEX informed that the initial export target of goods and services for this year is $18.4 billion, with goods making up around $12 billion.

Services exports continue to rise

On the services side, COMEX reported that exports during the 12-month period between October 2014 and September 2015 reached $7 billion, representing a 3 percent increase over the same period the previous year. On average, exports of services have shown an average annual growth of 8.6 percent over the last five years.

Three sectors accounted for the vast majority of exported services in 2016: tourism with 46 percent, computing and information technologies with 32 percent and business services with 16 percent.

The growth trend in this sector, COMEX stated, is primarily driven by the growth and consolidation of companies that have opened technical support centers and business service centers here in recent years, as well as the arrival of software development, digital animation and engineering firms.

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