The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamian construction industry was yesterday described as nearing a “critical point”, with one well-known contractor telling Tribune Business that his operation had cut staffing levels by 90 per cent or more than 100 persons.

Stephen Wrinkle, a Bahamian Contractors Association (BCA) past-president, told Tribune Business: “The industry  is down. Everyone is saying that business is down, business is slow.

“I was at a concrete company the other day and it was very slow. The local economy is in dire straits. There is page after page of repossessed homes in the newspapers. The lending market is in rough waters. The banks can’t lend them money and it’s a vicious cycle.”

He added: “We’ve scaled our business back so far now until it might be easier to close up than to stay open. From 120-plus employees I’m down to less than a dozen, and I’m not building back up. I wouldn’t dream of getting into anything and I know a lot of Bahamians who are in the same situation.”

Several sources within the construction industry, speaking with Tribune Business yesterday, added that the introduction of Value-Added Tax (VAT) had compounded the decline in construction-related activity, with increased buildings supplies costs and the lack of consumer financing adversely impacting new builds.

Another contractor, describing his business as a mid-sized operation, told Tribune Business: “Construction business has been down, and this has been even before January. I was actually on a development where a guy had planned to do 20 houses, and he is now contemplating whether to start a second one. 

“Last year I had maybe 25 guys employed. Right now, I have six. The work has declined and that is really compounded by the fact that banks aren’t lending money because people can’t qualify. Banks aren’t  lending to middle class people any more.

“When you look at the cost of materials, it’s not even a straight 7.5 per cent because everyone is marking things up, and so a developer’s costs could go up 10 per cent easily. Sometimes you import materials where your duty is more than the materials you bring in. It’s very difficult to make a profit in construction.”

  The contractor added: “When you see Baha Mar finishes, construction in this country will come to a complete stop. I just picked up my first job for the year. I was finishing up a job I had from last year.

“It’s not just the housing market that is down but there really isn’t any commercial construction. There’s construction out at Albany but the big boys are going to get that. I know things are bad when my vendors are calling for their cheque every week. There are a lot of contractors out there working to just break even or make a minimal profit. Your employees are crying that they need more money, and when their minds aren’t right productivity is going to be low.”

A local building materials supplier, speaking on condition of anonymity, told Tribune Business: “We’re at a critical point. Our sales have been decreasing. No one is building. There are so many jobs being affected and it trickles throughout the country.

“The Government needs to know we have a  problem and we need help. We’re not criticising but they need to know that we won’t be here very long at this rate because we will all cut down to a minimum and jobs are going to be lost.

“Jobs have already been lost. It’s just been a very dramatic impact. This has been my worst month of sales since I have been in business in five years. All construction-related businesses are being affected.”