NASSAU, BAHAMAS – A surge in domestic construction to $86.7 million by Q3 2018 may not necessarily be duplicated this year as officials report a decline in construction commitments going forward.
While many FDI ventures bolstered the construction sector for 2018, the completion of some of the bigger projects may mean a falloff in activity for the sector – which heavily sway a nation’s unemployment numbers.
Deputy Prime Minister and Minister of Finance Peter Turnquest said all indicators pointed to there being a slight decline in construction this year.
“The more forward-looking indicator—total mortgage commitments for new construction and repairs—fell by 8.6 per cent to $94.7 million,” said Turnquest. “Suggesting relatively mild domestic construction activity in the near-term.”
The numbers can suggest a loss in appetite for home ownership or, specifically, a decline in the ability by many Bahamians to be able to afford hefty mortgage payments currently.
Last year saw the opening of the final phase of the Rosewood Hotel in the Baha Mar Resort as well as the official opening of the entertainment complex at The Pointe.
Results from the Department of Statistics’ latest Labour Force Survey reveal that the jobless rate for The Bahamas featured a 70-basis point uptick to 10.7 per cent for the six months to November 2018. It’s a period of time that also includes the opening of many projects that absorb workers in the construction industry.
“Indications are that construction activity continued to be dominated by varied-scale foreign investment projects, although domestic private sector investment showed modest signs of recovery,” said Turnquest. “Using total mortgage disbursements for new construction and repairs as a proxy, an 8.5 per cent increase to $86.7 million signaled an expansion in domestic activity for the first nine months of 2018.”
Still, he was optimistic that more projects are in the pipeline and they will 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.
Around nine companies have already been approved under the Commercial Entities Act that are also being counted in the total for FDI to date.