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The Growth of Costa Rica's Manufacturing Exports

In recent years, Costa Rica’s manufacturing sector has emerged as a crucial engine for the country's exports, accounting for a remarkable 67% of total exports by the end of the last fiscal year. With total sales hitting approximately US$13.26 billion of the overall US$19.89 billion, the sector has demonstrated an impressive growth of 10% in value. This surge has been particularly fuelled by the performance of the precision and medical equipment segment, which remains a significant pillar of the export economy.

However, it’s not just the medical devices that are driving this growth. The country has diversified its manufacturing exports significantly, extending its offerings into various sectors, including electronics, chemicals, pharmaceuticals, metalworking, plastics, rubber, textiles, leather, and footwear. As a result, Costa Rica is making strides in not just maintaining its traditional stronghold in medical device exports but also expanding into other valuable product areas.

According to a comprehensive study by the Costa Rican Foreign Trade Promotion Agency (PROCOMER), titled "Export Performance of the Manufacturing Sector," the wide range of leading products contributing to this upward trajectory includes medical needles, catheters, medical prostheses, electro-diagnosis devices, electrical cables, antisera, tires, textiles, and clothing. These products underline the dynamic nature of Costa Rica’s manufacturing landscape.

Laura López, General Manager of PROCOMER, underscored the importance of manufacturing as a strategic pillar for the Costa Rican economy. She highlighted that the sector’s vigor is not solely dependent on the leadership of the precision and medical equipment industry but also on the progress of several other industrial segments that broaden the country’s offerings. This variety reinforces the industry's competitiveness in global markets.

The manufacturing sector’s diversification is evident in the number of exporting companies as well. Last year, a total of 1,703 businesses exported 3,368 different products. The primary destinations for these exports were the United States (55%), followed by the Netherlands (9%), and Belgium (4%). Interestingly, while North America captures the highest value of Costa Rican exports, Central America has emerged as the region with the most exporters. Approximately 1,245 companies sent goods to Central American nations during the analyzed period, primarily consisting of products like electrical wires, textiles, and various paints.

This trend of distributing exports indicates that Costa Rica boasts a robust foundation in geographically close markets while also gradually reaching out to strategic destinations worldwide, which is crucial for reducing reliance on single markets and enhancing the resilience of the export sector.

The study also reveals that the manufacturing sector is flourishing in both free trade zones and permanent regimes, showcasing the country's ability to sustain complex industrial processes under diverse production frameworks. An impressive 84% of the sector's exports arose from free trade zones, largely attributed to medical devices, needles, catheters, prostheses, and diagnostic equipment, whereas 14% emerged from the permanent regime, highlighted by exports of electrical cables, glass containers, paints, and laminated products made from iron and steel.

For further insight, the comprehensive report, "Export Performance of the Manufacturing Sector," can be accessed through the PROCOMER website under the Commercial Intelligence Studies section. This extensive data can help stakeholders and potential investors understand the evolving landscape of Costa Rica’s manufacturing exports and their significance in the regional and global market.