Other Leading Industries

Other Leading Industries

The construction industry was one of the most dynamic in El Salvador during the 1970s. Value added increased from US$50 million in 1977 to US$80 million in 1978 but then declined precipitously, reaching a low of US$17 million in 1980. The industry reported only moderate growth in the early 1980s. Also, the number of workers employed in construction declined by over 75 percent between 1980 and 1986, from 13,100 workers to only 3,100.

Paradoxically, despite the industry's general decline, the number of building permits issued tripled between 1979 and 1984. The increase, however, went for housing; the number of permits issued for the construction of factories or other commercial buildings dropped from 320 in 1979 to only 35 in 1984. It is unclear, however, whether or not all the approved buildings were actually built. When the October 1986 earthquake prompted massive capital inflows for reconstruction, however, the construction industry grew by 14 percent in 1987 and stimulated the economy's 2 percent increase in GDP that year.

El Salvador's mining industry was first established in the late nineteenth century when Charles Butters, who had pioneered the cyanide process for mineral separation, opened several gold mines. Two of his gold mines (San Sebastian and Divisadero) were highly productive; the San Sebastian mine by itself yielded US$16 million worth of gold between 1908 and 1928. Mining declined significantly by the early 1930s because world gold and silver prices dropped and costs rose. Mining, which generated only a fraction of GDP in 1987, has not played an important role in the Salvadoran economy since. El Salvador also has deposits of silver, copper, iron ore, sulfur, mercury, lead, zinc, and limestone; of these, only gold, silver, and limestone were mined in 1987, and only in limited amounts.


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