Despite figures released by the government showing a marked improvement in the construction sector in the first quarter of this year, contractors say for the most part their businesses are still struggling to rebound from tough economic times.
The level of construction activity in the Bahamas is a key economic indicator.
The word from the sector is that consumers are still in a cautious spending mode, against the backdrop of economic uncertainty sparked by a series of local and international disasters and the war in the Middle East that appears to be winding down.
“It’s slow right now,” Carl Treco, owner of Carl G. Treco Contractors said. “I think the war has to some extent exacerbated the problem, but we realize that business was slowing down from a year ago. We get inquires about residential work, but nowhere near as much as we used to get in past times.”
Max Wells, owner of Calypso Painters and Construction said there has been no noticeable positive change in business. He said he thought business would have picked up by April, but that has not happened.
“Nothing much is happening, and I’ve spoken to a couple of people who say that work is still slow. We haven’t recovered, I haven’t gotten anything big so far,” he said.
“The war in Iraq had something to do with it. Generally, investors tend to hold back on spending money during times of war. I think everybody is still waiting to see what’s going to happen.”
Last week, the Minister of Works and Utilities Bradley Roberts said that the construction industry in New Providence had experienced a 20 percent increase during the first quarter of this year, over the same period of 2002.
But building contractors say they have yet to see the tangible result of that figure.
According to the minister’s statistics, building permit applications submitted for the first quarter in 2002 totalled 670, while the total number submitted this year was 844. The total value of building requests in 2003 totalled $90.8 million as opposed to $85.5 million in 2002. However, the figures relate primarily to residential developments, and not the large commercial developments like Kerzner International, which impacted the Bahamas’ building statistics in 1998-1999, or the Four Seasons Emerald Bay resort that is still under construction in Exuma.
Robert Wells, the public relations manager for the Contractors Association also endorsed the sentiment that the construction sector is “definitely not rebounding.”
“Actually it’s far from that,” he said. “Basically from my end it’s a significant downturn. And I’m not disputing what the minister is saying, maybe they had more applications from the business prospects,” Mr. Wells said.
“A lot of times, the information they go by is from the application from business permits,” he added.
However, the Corporate Secretary in the Small Business Owners Association, Marlon Johnson has a different story to tell. He says he has been getting mixed signals from many contractors, painting another picture of the state of the construction industry.
“Generally many of the small business contractors have been on an upward swing,” he said. “Our hope is that that it’s a signal that we’ve seen the worst in the economy and that we are on the rebound, but it’s too early to make that assessment yet, but the initial signs seem positive.”
But Mr. Johnson’s take on the sector differs from some of the persons who are actually in the industry, like this struggling contractor who spoke under the condition of anonymity.
He says he might not recover from a lacklustre economy for at least another year.
“Things are pretty crappy and at first, everyone was saying that things would rebound by March, but now it’s May and as you can see business is pretty bad,” he said. “It’s a shame because I’m now in a position where I might have to let some of my staff go, depending on how bad it gets this month.”
“So I’m gauging the sector day-by-day, hoping for a full recovery. But I don’t see that happening for another seven or eight months,” he added.
It is projected that the local construction industry will be responsible for injecting some $1.03 million from building permit fees into the Public Treasury. <
By Rogan M. Smith, The Bahama Journal
