By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian Contractors Association’s (BCA) president yesterday asserted that the construction sector can “at least double” the 2024 second quarter’s $408m in total activity if properly regulated.

Leonard Sands told Tribune Business that finally ending the eight-year wait to fully implement licensing and self-regulation for Bahamian contractors will reduce construction-related risk and give both residential and business clients greater “confidence” to proceed with projects knowing there will be redress for potential grievances.

Speaking after the Bahamas National Statistical Institute (BNSI) yesterday revealed that the value of nationwide construction starts more than doubled during the three months to end-June, expanding by 172.28 percent or $61.431m to $97.090m as opposed to just $35.659m in the prior year, he reiterated his belief that the absence of proper regulation is holding back the industry and wider Bahamian economic output.

“While this information certainly does represent continued strength and confidence in the industry, what it certainly does not represent, as I have often mentioned, is the fact that a regulated, licensed industry would probably at least double the output we are seeing, at least double the number of permits, at least double the value of construction,” Mr Sands told this newspaper.

Challenged to back up this assertion, he added: “If we were to be really practical about it, if you were told you were going to an island that you don’t know and build a home for your family in an environment that’s not regulated, if something goes wrong there’s no recourse, no guidelines to protect you and your investment.

“The courts are a very long process and there are no guarantees in that space. It’s a very apprehensive situation. You have to take on a certain level of risk to engage in that environment. That being the case, for there to be $223.265m in permits approved during the second quarter, that is still saying persons are willing to take the chance so let’s extrapolate from that.

“What will be the amount of confidence you have in a regulated environment where where you have certainty that, if things happen, you know there will be very little risk that you are ripped off? That’s the premise that that number will absolutely be double. The main question is does the Government not see the value of doubling the amount of construction activity which would double the level of taxes they get from the industry?”

Together with the $223.265m in permit approvals and $97m in construction starts, the $87.295m in building completions during the 2024 second quarter - a figure less than $1m off the prior year’s outcome - takes total construction activity during the three months to end-June to just under $408m. Mr Sands’ argument, though, is that activity could rise to more than $800m with a properly-regulated industry.

The Construction Contractors Act was passed by Parliament under the last Christie administration after being spearheaded by now-prime minister Philip Davis KC. It was intended to bring self-regulation to the last major industry and profession lacking proper oversight but, some eight years after its 2016 passage, it has yet to be fully implemented or brought into effect.

This is because the Board that would oversee the licensing and certification of contractors, and help provide redress for consumer grievances related to shoddy workmanship, has yet to be appointed. Describing the Board’s creation as a “win-win” for The Bahamas, Mr Sands there had been no further progress in establishing it.

“I believe they [the Government] have more important matters, but when you’re talking about the economy and construction is the second major contributor to gross domestic product (GDP), you have to put that in an important place and get it done,” he told this newspaper.

Still, Mr Sands said the Institute’s report was “very encouraging” as it reflected that, notwithstanding the absence of industry regulation, “there’s confidence in the sector in the entire Bahamas”. Pointing out that permits signal the intent to begin construction, while starts and completions represent actual building work, he added: “It certainly represents the difficulties in the marketplace for construction financing for residential and commercial projects.

“But I think, based on the numbers we are seeing, the outlook is positive. I don’t think we’re going to see the kind of apprehension that would have existed at the start of 2024, coming out of recessionary challenges, COVID challenges. We have moved past that. I think we’re going to look at strengthening, ways to get more aggressive with the value and number of permits we’re going to see in 2025.”

Mr Sands said the high demand for construction services throughout The Bahamas means that this nation needs to address workforce training and skills to ensure labour can meet this challenge. Otherwise, he warned, The Bahamas will have to important expatriate workers with the skills demanded by both developers and contractors to ensure work keeps pace.

The Bahamas National Statistical Institute, analysing the figures, said: “The total number of permits issued for the whole Bahamas (440) was 23 projects more than the 417 projects recorded in the second quarter 2023, while the value increased by $5m over the same period.

“This increase in value was led by the commercial/industrial sector, which increased by approximately $61m. However, this increase was diminished by decreases in value in the private/residential sector and the public sector, which fell by $34m and $23m, respectively.”

As for building starts, the report added: “There was an increase of six projects in the number of construction starts between the second quarter 2023 and second quarter 2024, resulting in an increase in value of $61m.

“The main factors that resulted in the increase in the value of construction starts were increases in the private/residential sector ($60m) and the commercial/industry sector ($1m). Conversely, the public sector decreased by $206,000.”

Turning to construction completions, the Bahamas National Statistical Institute said: “The total number of construction completions increased by eight projects in the second quarter of 2024, moving from 194 projects in the second quarter of 2023 to 202 projects in 2024.

“However there was a decrease of approximately $959,000 in the total value from $88m in the second quarter of 2023 to $87m in the same quarter of 2024. The decrease in value was led by the commercial/industrial sector, which had a decrease of $10m, and the public sector which also decreased by approximately $900,000. During this same period, however, the private/residential sector increased by $10m.”