NASSAU, BAHAMAS – It may be too early to predict a slowdown in the construction sector, with the head of the Bahamian Contractors Association pointing to various factors that may sustain the industry for much longer than projected.
The association is now trying to determine the direct impact of a slowdown in domestic construction activity, said BCA President Michael Pratt.
In its latest Quarterly Economic Review, the Central Bank of The Bahamas’ (CBOB) suggested a tapering off in domestic construction growth at the end of 2018, compared to the same period a year earlier.
“The real direct effect on our economy as it relates to construction activity and when one considers the process for contractors is sometimes not directly related to those permits,” Pratt said.
“For example, because someone has put a permit in does not mean that the permit has been executed during that period.”
While many foreign direct investment (FDI) ventures bolstered the construction sector for 2018, the completion of some of the bigger projects, including Baha Mar, may mean a falloff in activity for the sector, which heavily sway a nation’s unemployment numbers.
Still, Pratt argued that the total picture of construction activity has to be taken into consideration.
“Another factor you may have to look at is, for example, if Baha Mar had permits from say five years ago and they’re quiet now, it does not mean nothing is going on there because they could still be executing their contracts…but they don’t need a permit as they got that five years ago,” he explained.
“So, it doesn’t necessarily mean construction went down, but permit requests are going down.”
Last year saw the opening of the final phase of Baha Mar’s Rosewood, as well as the official opening of the entertainment complex at The Pointe.
Results from the latest Labour Force Survey, released by the Department of Statistics earlier this year, revealed that the national unemployment rate increased from 10 per cent in May 2018 to 10.7 per cent in November 2018.
It’s a period of time that also includes the opening of many projects that absorb workers in the construction industry.
Deputy Prime Minister and Minister of Finance Peter Turnquest was optimistic that more construction projects were in the pipeline and they would realize further gains in the rate of economic growth and employment opportunities in the short to medium term.
“[These] include the $194 million Sterling Hurricane Hole Community Resort and Marina, the $5.2 million Pinder’s Bay Ltd project that is to feature 28 residential beachfront bungalows and a clubhouse, and the $580 million South Abaco investment, for the development of a 5-star Residential Resort and Marina,” Turnquest said.
Nine companies have already been approved under the Commercial Entities Act.