No Signs of an Economic Slowdown in Chiclayo

Recent financial figures indicate that the impressive growth Peru has experienced over the past six or more years is starting to decline. For the fifth consecutive month Peru’s growth has been under 5%. The numbers are still respectable but are not the heady 8 – 10% seen in the recent past. In fact this last Monday the Peruvian government sold $230 million US dollars in an effort to prop up the Nuevo sole which has gone from a ratio of 2.55 to the dollar some months ago to the present 2.8. Should this downward trend continue it would be expected that consumer spending and new construction would show signs of slowing but that hasn’t happened yet in Chiclayo. Casual observation indicates a flourishing economy.

Probably the most visible sign of continuing growth is the construction taking place at Chiclayo’s Real Plaza Mall, which opened its doors just eight years ago in 2005. Last year Promart; a home improvement center became Real Plaza’s latest tenant and above it was constructed a six-level parking ramp. At the time many people questioned the need for such a large parking facility, until recently when the outside parking area was cordoned off and construction began that will double the available retail space of the mall. And while that construction is going on the food court has seen the addition of Chili’s restaurant, with a Popeyes restaurant soon to follow. And Pardo’s Chicken, one of the original restaurants in the food court has temporarily closed to remodel and expand.

But it’s not just retail construction taking place. This recently completed condo is one of dozens that are in various stages of construction in a relatively small area of the city, and it seems that every day new signs are appearing on vacant lots indicating that another four to five floor condo will soon be ready for occupancy. And many owners of existing housing are remodeling and expanding upward.

This salon and spa complex is one of several to open recently in Chiclayo featuring 20+ chairs, uniformed staff and multiple rooms for various treatments. Obviously beauty shops have existed in Chiclayo for some time, but they are much smaller and ‘rustic’ in their furnishings and equipment.

The Garza Hotel, previously one of Chiclayo’s ‘big four’ hotels is no more. In its place is the completely remodeled and expanded Win Meier hotel and Casino. A delegation from Columbia is there now while taking part in the Bolivarian Games being held in Chiclayo and elsewhere in Peru. Meals in the Win Meier restaurant are not inexpensive but Chiclayanos are eating there, and shopping at the mall, and getting their hair done at the salons, and buying new cars at one of several newly opened car dealerships. One wonders if an upper-middle class is just emerging as a result of the booming economy the past few years, or have they always been here with no place to spend their money? Not that Peruvians are into conspicuous consumption or display of wealth. The opposite is true…they tend to be very unpretentious.  Well, that is unless you consider the designer dog breeds showing up as being pretentious, and the pet salons opening on every other corner to care for the dog’s needs including designer leashes and pet clothing.   

New construction is largely limited to retail and housing…there is no money being spent on new manufacturing facilities. In fact there is very little manufacturing remaining in Chiclayo.  There was a time when Chiclayo could boast of many factories producing everything from noodles to car parts. Several bottling companies produced beer, soft drinks and rum, and food processing plants packaged tons of rice, sugar and other food products. A huge Nestle plant that employed hundreds existed on the spot the Real Plaza Mall now occupies. All are gone now, most swallowed up by that behemoth Lima to the south. What remains are a few huge empty lots where the factories once stood, and it is likely that even these reminders of the past will soon be occupied by a new condo complex or retail outlet.

The face of Chiclayo is changing, probably more rapidly than many older residents would like to see. Whether that change persists if the national economy continues to slow remains to be seen.

One construction project that hasn’t begun is the new house in La Raya for Luzmila and her girls. We’ve got $210 toward our goal of $1500. We need your help. Please visit the Promesa Peru web page to donate.