Contractors seek stimulus package

This year was supposed to be a boon for the construction sector. In an election year, the industry, which has been in a state of flux waiting on the right conditions to stimulate activity, was eager and excited as it anticipated the inevitable increase in government spending on the usual promise projects – road paving, drainage and other construction that are the hallmark of a general election and often the bread and butter of smaller contractors.

There were also mega-projects in the pipeline like the completion of the Point Fortin Highway extension, the Sangre Grande Highway extension and upgrades to the ANR Robinson International Airport. Then came covid19. The pandemic forced the Government to consider a nationwide shutdown of all non-essential business activity. Among that was construction. As of midnight on March 28, the Public Health Ordinance declared that the construction industry was considered a non-essential activity and job sites were shut as workers were ordered to stay at home.

The only segments of the industry where construction activities were approved to continue were for medical facilities and Curepe Interchange Project.

“The stay-at-home initiative has unexpectedly suspended business income and employment generating activities and added significant business uncertainty during the current second quarter and may very likely impact third quarter industry activities,” TT Contractors’ Association (TTCA) president Glenn Mahabirsingh told Business Day in a statement.

Construction activity is a key indicator of the country’s non-energy gross domestic product. The Central Bank’s Economic Bulletin for January 2020 has construction’s contribution to the country’s real GDP at 5.5 per cent or $8.8 billion. And according to the 2019 Review of the Economy, the construction sector declined 8.2 per cent in the first quarter of the year. There were also other indications of lower construction activity during the quarter, such as reductions in the domestic output of various building aggregates and construction material, namely, clay bricks, blocks and tiles; concrete products; metal building material; iron, steel and related products; and glass and plastic products for construction.

In 2018, the Review noted, during the third quarter of fiscal 2018, 1,000 people in construction lost their jobs and the industry overall had an unemployment rate of 6.8 per cent – nearly three per cent the national average of four per cent. The Economic Bulletin notes that 1,397 retrenchment notices filed with the Ministry of Labour in 2019, 262 were from construction. These formal notices are also unlikely to capture the true extent of lay-offs in the sector, where a significant part of the workforce comprises unskilled labourers who get paid a daily or hourly wage. Given the nature of the lockdown and its impact on construction, it’s likely that many of these workers will have been among the first to be let go.

The TTCA has attempted to intervene writing to the Government to ask for some kind of support to the sector.

“Noting the Government’s commitment to accelerate monies owed to contractors' suppliers and businesses together with VAT returns, the TTCA sees this as an opportunity for increased liquidity and ensuring that the construction industry can continue to stay in business and maintain critical levels of employment,” Mahabirsingh said, even as the organisation endorses the initiative to lower interest rates at banks and credit unions.

The TTCA is also in the process of drafting appropriate construction site operating procedures and protocols which will be presented to the Ministry of Works, Ministry of Health and OSHA. These proposed procedures and protocols, once adopted, are expected to be a guide when construction sites are reopened and mitigate or eliminate the risk of covid19 transmission on construction sites. This, Mahabirsingh said, is one way the association is trying to collaborate with all stakeholders to develop a well-integrates recovery strategy post-pandemic.

Given the severe negative financial fallout covid19 will have on the construction sector and by extension the TT economy, he said the TTCA sees the Government funding a stimulus package which will initially focus on the construction sector. “The construction sector has the ability to create the largest number of employment opportunities within the shortest time period. It also has the ability to kick-start other economic sectors of the country.”