Jamaica Seeing Construction Boom

Jamaica is seeing a surge in construction, with a number of public- and private-sector-led residential and non-residential projects taking place, providing employment for thousands of persons.

Right across the country, one can readily spot several housing and commercial high-rise buildings being erected, particularly in the Corporate Area.

Among these are the new corporate offices of the Ministry of Foreign Affairs and Foreign Trade, and expansion of GraceKennedy’s head office in downtown Kingston; business process outsourcing (BPO) operations along Half-Way-Tree Road; hotel and housing developments and road projects.

This is in keeping with the Government’s thrust to boost economic growth and job creation through infrastructural development.

First Vice-President, Integrated Master Builders’ Association (IMAJ), Lenworth Kelly, tells JIS News that “there is a fair amount of activity in the market”.

He notes that the projects are not limited to Kingston and St. Andrew, pointing to infrastructural works being undertaken by the National Water Commission (NWC) and the National Works Agency (NWA) right across the country.

He also points to quasi-governmental organisations such as the National Housing Trust (NHT) and the Housing Agency of Jamaica (HAJ) that have ongoing housing projects, largely in parishes outside of Kingston.

In addition, road improvement/expansion projects are taking place on Barbican Road and Mandela Highway, and similar works have begun on Hagley Park Road and Constant Spring/Eastwood Park Road.

The Planning Institute of Jamaica (PIOJ), in its report for the April to June 2017 quarter, said increased activity in residential and non-residential projects pushed growth in the sector to 1.5 per cent.

Total housing starts increased from 385 units in the corresponding quarter of 2016 to 1,687 units. This reflected new housing developments by the NHT with 684 starts, up 77.7 per cent, as well as by a private developer, through the NHT interim financing scheme, for some 1,003 starts at the Winchester Estate in Hanover.

For the non-residential developments, these included new projects as well as expansion and renovation works at several resort properties, including the Wyndham Hotel – 455 rooms; Oyster Bay – 355 rooms; and Spanish Court II – 120 rooms, while construction of several commercial properties remained ongoing.

The NWA also increased expenditure by 201.9 per cent to $3 billion for road clearing and rehabilitation following the heavy rainfall during the quarter, while the Port Authority of Jamaica’s spending on projects was increased by 201.1 per cent, to US $365.2 million.

The growth continued in the October to December 2017 quarter, supported by a 77.9 per cent increase in the total value of mortgages provided by the NHT as well as work in progress on previously started developments.

With respect to the non-residential category, activities included increased construction and renovation of hotels and commercial buildings.

The Investors Choice online magazine is projecting that real value-added in construction will continue in 2018, with the sector to get a boost from the start of the Harbour View to Portland roadworks and widening of the Hagley Park and Constant Spring roads.

Mr. Kelly tells JIS News that the construction industry stakeholders welcome these new/ongoing projects “where we have employment of mass labour”.

He notes that construction is the largest mass employer, particularly of unskilled labour.

Comprising over 500 firms, the construction industry employs more than 100,000 persons.

Mr. Kelly points out that the construction sector is especially crucial in terms of its contribution to the development of local communities and overall stimulation of economic growth.

He notes, for example, that local businesses situated in the areas in which construction projects are taking place would normally benefit from the operations.

“So, if you are out in St. Thomas, obviously, when you are employing people there, those people have a spend in that local economy so you get that trickle-down. It extends in other sectors – restaurants, shops, supermarkets, meat shops, hardware, and so on,” he points out.

He notes, as well, that contractors purchase from local hardware merchants, manufacturers and other suppliers, which also provides a stimulus to their businesses.

Emphasising the importance of the industry to national development, Chairman of the Construction Industry Council, Gary Walters, says the construction is a vital part of the economy, promoting investment through its own activities as well as generating further investment in the broader economy.

The sector is estimated to contribute approximately 7. 2 per cent of the country’s gross domestic product (GDP).

Mr. Walters says it also provides the physical infrastructure that underpins the economy and the built environment that more directly influences the quality of life of Jamaican citizens.

Former Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Dr. Horace Chang, says the Administration is committed to facilitating and engendering productivity in the construction sector.

Addressing the eighth annual Mona School of Business and Management (MSBM) Roundtable and CEO Breakfast Forum at The University of the West Indies, Mona, last year, Dr. Chang said that steps have been taken to increase transparency and reduce uncertainty around the awarding of government contracts.

In addition, the Government has been working to streamline the tender process, reduce bureaucracy, ensure that realistic project planning and feasibility studies are done, increase consultation with industry players to improve project outcomes, and ensure that there is greater political consensus around planned projects to improve market confidence and guarantee continuity.

Further, there is also a draft Construction Policy, which seeks to address a range of issues, including encouragement of wider participation of industry players and innovation in and modernisation of the industry, promoting regional cooperation, creation of an enabling regulatory environment, improving construction management and greater competitiveness.

The Government is working to achieve further growth in the sector and remains committed to pursuing policies that encourage and facilitate this goal.