The Tribune

By YOURI KEMP

Tribune Business

Reporter

ykemp@tribunemedia.net

BAHAMIAN professionals yesterday said “things are looking great” for the construction industry in 2023 with multiple new projects anticipated to break ground during the year.

Quentin Knowles, the Bahamas Society of Engineers (BSE) president, told Tribune Business: “There are many, many opportunities out there.” This was despite the Bahamas National Statistics Institute’s report on 2022 third quarter construction activities showing that permits issued were down almost 20 percent from the same period in the previous year.

“There were very few prospects last year, but this year, and I mean since the beginning of the December before, there was a lot of optimism in the Family Islands for work, a lot of stuff happening on Paradise Island,” Mr Knowles added. “There is always that constant work going on in Albany and out in the western section. These are constant things now, and it’s looking pretty good for this year.”

Whether or not last year’s construction activity spills over into 2023 remains to be seen. Mr Knowles said: “There’s always a delay with permit applications, because there is a design delay where you have clients out there expecting to do this work, and they go and hire engineers and architects to do the work.”

Initial project design typically takes several months before it is formally presented to the Ministry of Works for the necessary permits and approvals, so there may be projects being planned now that have not reached that stage. Thus counting permit applications can be “misleading” as an indicator of future construction activity.

Mr Knowles said: “Intuitively, what I have seen as a contractor, working as an engineer on design teams, and as a contractor doing work on the construction side, the activity and the interest and the requests, they are varied and many.

“It’s looking pretty good from my perspective. Counting permits is a good statistic, but because of that delay and the lag between people actually starting design work and the time it has been submitted to the Ministry of Works for approval, it can be misleading.”

Leonard Sands, the Bahamian Contractors Association’s president, said construction is “holding steady” and that he is “cautiously optimistic” for the rest of 2023.

He added: “The appointment of thee Construction Contractors Board continues to be the most significant thing that can impact the GDP of the country. Until such time as the Board is appointed, there will still be hundreds of millions of dollars of work that could benefit all contractors that remains to be engaged because investors are uncomfortable to understand who is a contractor in the Commonwealth of The Bahamas.”

The value of new construction permits issued in the 2022 third quarter fell by almost 20 percent year-over-year due to a significant drop-off in new commercial projects. The Bahamas National Statistical Institute, in unveiling building construction data for the three months to end- September 2022, revealed that increased residential developments helped mitigate some of the year-over-year decline in higher value corporate projects.

Speaking to permits, which are an indicator of future industry activity, its report said: “The [total] number of new construction permits Issued in the third quarter 2022 (424) was higher than in third quarter 2021 (380) by 44 projects or 12 percent. Conversely, the value of permits Issued over this period decreased from $167m in 2021 to $135m in 2022.

“The main reason for this decrease was a drop of 59 percent in the commercial/industrial sector of $47m, which was mitigated by increases in the private/ residential sector of $11m and the public sector of $4m. The third quarter 2022 permits value was shared across the islands, with New Providence representing 76 percent, Grand Bahama 20 percent and the remaining Family Islands 4 percent.”

For New Providence, the value of new construction permits issued during the 2022 third quarter fell by 28.8 percent or $41.5m year-over-year, dropping from $144.377m in the year-before period to $102.8m. However, the value of new construction permits issued on Grand Bahama more than doubled, rising from $12.837m in the 2021 third quarter to $26.69m last year. Family Island new construction permits nearly halved in value, going from $10.091m to $5.762m.

As for actual construction work, the Institute said: “The number of new construction starts [across the] Bahamas decreased by 17 when comparing the third quarter 2021 (150) and third quarter 2022 (133). During this same period, however, the value of construction starts increased by $35m or 74 percent.

“This increase in value was led by the private/ residential sector and the public sector, with increases of $36m and $5,000 respectively. Contrarily, the commercial/ industrial sector decreased by $645,000 or 4 percent. New Providence represented 76 percent, and Grand Bahama 24 percent, of the recorded number of new construction starts in the third quarter 2022.”

Residential construction starts were flat year-over-year at 119 for the 2022 third quarter, but commercial related projects declined year-over-year from 31 in 2021 to just 13 - a fall of 58 percent.

“The total Bahamas number of construction completions in the third quarter 2022 (165) showed a decrease of six projects when compared with the same period in 2021 (171),” the Institute said. “The value of construction completions, however, increased by approximately $106m or 176 percent.

“There was an increase in the commercial/industrial sector of approximately $114m leading this overall increase in value. New Providence’s commercial/ industrial sector construction completions value increased from $11m to $126m over this same period.”