The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian Contractors Association’s (BCA) president yesterday told Tribune Business he was forced to lay-off 80 per cent of his own staff “just to survive”, as he called on the Government and private developers to bring “sweet relief” by kickstarting the housing market.

Explaining that he had been forced to cut the workforce at his own firm, Dykton Mechanical Company, from between 20-30 to just a handful now, Godfrey Forbes said that while the recession’s effects were starting to ease, too many contractors were still struggling for work.

Suggesting that between 1,000-1,500 smaller Bahamian contractors “may not have much to do”, Mr Forbes said the sector needed to rebound to a level where 60-80 per cent of firms had work to sustain them for a year.

Disclosing that about 60 per cent of Bahamian contractors did not have any work at the recession’s peak, the BCA president suggested no major improvements would be felt until the domestic housing market rebounded.

With unemployment high, incomes down and banks only lending to top-notch clients, the prospects for an immediate housing market recovery - the sector that most small contractors rely on - is not good.

And, in the absence of legislation and regulations to govern the Bahamian construction industry, Mr Forbes said the sector faced a problem “for years to come” from expatriate personnel staying in this nation after the projects they were originally hired for had finished.

Many either joint ventured with Bahamians or married locally, and the BCA president said they had a “tendency to be hired to do work in the most affluent areas”.

He called for better co-ordination between the Departments of Immigration and Labour on the issue, and questioned whether, in granting work permits to foreign construction personnel, the Government saw it more as a revenue-raising issue.

“I’ve had personal experience where I had to lay-off about 80 per cent of staff just to keep going,” Mr Forbes told Tribune Business, as an example of the economic downturn’s effects.

“When it comes to the industry right now, we have seen there has begun to be a softening where the devastating effects of the recession are easing somewhat.

“But, even though that’s what we’re seeing, that’s not to say we’re at all comfortable with the way the industry is at this point. We have too many contractors not doing much at all, and while some contractors have one or two projects, that’s not much either.

“With the mortgage institutions backing off in terms of the number of mortgages they find themselves dealing with, that is absolutely something that affects smaller contractors. These are the things smaller contractors look for, and that represents the majority of contractors in the country.”

The Central Bank of the Bahamas reported a 24.9 per cent contraction in 2012 second quarter mortgage disbursements to $28 million year-over-year, featuring a “sharp” 25.2 per cent decline in residential mortgages to $25.8 million.

While those figures were somewhat depressing, the overall mortgage/housing market picture was mixed. Mortgage commitments - a forward looking indicator - rose in number by 34 to 160, with a corresponding $12.4 million rise in value to $31.5 million.”

Mr Forbes said that while there were several thousand contractors in the Bahamas, only 50-60 were considered medium-large firms able to take on bigger projects with higher risk factors.

Recalling his, and the BCA’s, recent meeting with Minister of Housing, Kenred Dorsett, Mr Forbes added: “We hope the Government will have come up with some funds they can allocate to stimulate the housing projects they were dealing with in years past.

“If that [the Government housing programme] could kick-off again, that would bring sweet relief to a number of smaller contractors who are hurting and still looking for work.

“Right now, there has to be a real, serious effort made by the Government and the private sector dealing with housing, because we may have anywhere around 1,000-,1500 contractors that do not have much to do all year-long.

“They still have homes and businesses to maintain, and without anything coming into the business they will be the first ones to die a slow death.”

While some ‘green shoots’ of recovery had been seen, it had not yet reached the point where the housing market was in a good condition, Mr Forbes added.

Noting that school repair contracts provided limited respite, due to their short duration, the BCA president told Tribune Business: “We still need a lot more to be done, particularly in that area [housing], to offset the drop-off during the recession.

“If we can get back to being on a coverage level where we have 60-80 per cent of contractors in the country saying they have one or two projects this year, and are making a few dollars, if we can see that happening with our contractors we can say things are happening.

“That spells great relief from what we experienced over the last three years. We were somewhere in the vicinity of 60 per cent of our contractors not really having any work going on and, if they had something it was very insignificant, a little renovation here and there. It was not much to keep a company going.”