Costa Rica’s August Growth Leaned on Construction as Manufacturing Shrank

October 15, 2026

The central bank’s August activity index put Costa Rica’s year-over-year growth at 2.2%, but the headline hides a sharp split underneath: construction rose 11.0% while manufacturing slipped 1.1%. We read the release as a story about sector mix, in which a handful of domestic activities are carrying growth that export manufacturing carried a year ago.

Key takeaways

Construction grew 11.0% and supplied 30.2% of August’s growth, while manufacturing contracted 1.1%.
Four activities explained 63.3% of the increase, so the growth base is narrower than the 2.2% headline suggests.
Investors should test whether a project’s revenue follows the construction cycle or the export cycle, because the two moved in opposite directions.

What Happened

On 13 October the Central Bank of Costa Rica (BCCR) published its Monthly Economic Activity Index for August 2026. Here is what the release and the press coverage of it show:

Output grew 2.2% year over year on the trend-cycle series, 3.4 percentage points slower than in August 2025. The average for the first eight months is 3.4%.
The definitive regime (firms outside the free-zone and special regimes) grew 3.2% and supplied 95.3% of the growth. The special regimes grew 0.7% and supplied 4.7%.
Construction rose 11.0%, with private works up 11.7% and public infrastructure up 9.0%. Construction alone supplied 30.2% of the growth. The BCCR points to non-residential works such as industrial warehouses, shopping centers and offices, plus social-interest housing.
Manufacturing fell 1.1%, against growth of 8.9% a year earlier. Within the special regimes, medical implements slipped 0.7% after rising 38.1% in August 2025. The BCCR cites that high base and the closure of electronic component and board makers.
Construction, professional and administrative services, commerce and financial services together explained 63.3% of growth. Real estate services grew 3.4% and hotels and restaurants 2.6%.

Chart: Year-over-year growth by activity, August 2026

Activity	August 2026 (% y/y)	August 2025 (% y/y)
Construction	11.0	n/a
Financial and insurance services	4.1	n/a
Real estate services	3.4	n/a
Commerce	2.8	n/a
Professional and administrative services	2.8	n/a
Hotels and restaurants	2.6	1.3
Agriculture and livestock	0.4	n/a
Manufacturing	-1.1	8.9
Total activity index	2.2	5.6

Source: Central Bank of Costa Rica (BCCR) via Delfino.cr, 13 October 2026. Trend-cycle series; n/a means the prior-year figure was not reported in the sources we checked. Preliminary and subject to revision.

Why It Matters for Costa Rica

For a year or more, the investment case for Costa Rica has leaned on the export engine: free-zone manufacturing, medical devices and the foreign direct investment that follows them. August shows that engine cooling while domestic activity, led by building, picks up the slack. That is not automatically bad news. A construction-led quarter means developers, contractors and lenders are active, and private works at 11.7% suggest projects are being financed and advanced.

It does change the question an allocator should ask. A deal that depends on industrial demand, such as a logistics building let to a free-zone tenant, sits in a different cycle from a residential or retail project that depends on domestic incomes. In August those two cycles pulled apart. Hotels and restaurants growing 2.6% after 1.3% a year earlier also tells us that visitor-linked demand is not deteriorating, which matters for anyone underwriting rental or hospitality income.

The mix inside construction is also moving. The BCCR’s private construction survey for the second quarter, released in July, showed residential building up 36.3% and non-residential down 11.6%. August’s description leans toward non-residential works. The two releases use different measures and periods, so we do not treat them as a contradiction, but they show that the composition shifts from quarter to quarter and should not be extrapolated.

Where the Story Is Weaker

Construction is a measure of work in progress, not of demand. Strong building activity can precede weak absorption if units or space arrive faster than buyers and tenants. It is also volatile: two years earlier, in August 2024, the BCCR reported construction down 4.2%, so double-digit swings in either direction are normal for this series.

The manufacturing decline is also partly a base effect. Medical implements grew 38.1% in August 2025, so a small contraction a year later is not the same as structural weakness. Closures of electronic component makers are a genuine negative, but we have no evidence yet that they signal a wider retreat. Finally, this is one month of a trend-cycle series that the BCCR revises, and we do not yet have the breakdown behind every sector rate.

Investor Read-Through

Classify each holding by its dominant demand driver: construction cycle, export manufacturing, or domestic consumption and services. The August data shows these can diverge within a single month.
For development exposure, ask for absorption evidence (pre-sales, signed leases) rather than relying on sector construction growth. Our read, not a forecast: building activity tends to reach the market before demand data does.
Use three-month averages for sector rates in underwriting. Single-month prints, including this one, are noisy and get revised.
For assets leased to free-zone tenants, ask each tenant about order backlog and customer concentration. Our read, not a forecast: the special-regime slowdown matters more to those assets than to domestic ones.

Data as of 15 October 2026. Figures marked preliminary will be revised. This is general market commentary, not investment advice.