Central Bank: FDI projects continue to support construction sector

Central Bank: FDI projects continue to support construction sector
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NASSAU, BAHAMAS — Construction sector activity in the second quarter of the year remained largely supported by ongoing varied scale commercial foreign investment projects, while domestic financed activity remained subdued.

The Central Bank in its quarterly economic review for June 2020 stated: “Construction sector activity during the second quarter remained supported by ongoing varied-scale commercial foreign investment projects. However, domestic-financed activity remained subdued.”

Further, the regulator noted noted that total mortgage disbursements for new construction and repairs declined further by 45.9 percent or $12.5 million to $14.7 million, after a 13.1 percent falloff a year earlier.

“In particular, the residential component contracted by 45.2 per cent ($11.8 million) to $14.4 million, following a 9.2 percent reduction in 2019,” the bank stated.

Commercial disbursements reduced by 63.5 percent ($0.7 million) to $0.3 million, relative to a 58.4 percent decrease during the previous year, the bank noted, adding that total mortgage commitments for new buildings and repairs—a forward-looking indicator of domestic activity—lessened in number from 156 to 78.

Still, former Bahamian Contractors Association (BCA) president Leonard Sands said there is remains reason for cautious optimism over the industry’s future.

“It is quite active in certain sectors of the island. On the domestic side I don’t think it is robust but I think it’s coming along steadily. There are projects that were stalled because of COVID-19 that are now continuing,” said Sands.

He added: “As a participant in the industry I have to continue to be hopeful. The government has indicated that it is fast-tracking a number of projects and that will have an impact on the sector. We know that there will always be a demand for housing; pent up demand and limited supply.”