CONSTRUCTION (2009)

During 2009, real value added production in the sector stood at J$39.4 billion, 4.6 per cent lower than the J$41.3 billion realized in 2008. The major contributing factor was a decline in output of several construction materials except cement whose overall output increased in 2009 by 1.7 per cent to 736,919 tonnes. 

The Government's capital expenditure was J$23,142.7 million in 2009. The five (5) institutions which had the highest expenditure were:

1. Ministry of Transport and Works - $5,124.0 million

2. The Telecommunications sub-sector  - $4,625.4 million

3. Port Authority of Jamaica  -  $4,387.6 million

4. National Road Operating and Construction Company (NROCC) -  $3,191.9 million

5. Urban Development Corporation (UDC) Ltd.  - $1,839.9 million

Existing and Proposed Projects 

The UDC carried out construction and installation work on nine projects across the island in 2009. They are the Montego Bay Convention Centre and the Montego Bay Sports Complex (both St. James); the Urban Transportation Centre and the St. William Grant Park (both Downtown Kingston); Emancipation Square and Hellshire Glades Housing Phase ll (St. Catherine); Green Grotto Caves - Contract 2 (St. Ann); Reach Falls - Phase ll (Portland) and the Port Maria Civic Centre ll (St. Mary). 

Expansion and renovation work was done on both International Airports, Norman Manley and Donald Sangster, as part of the Capital Development Programme. The renovation were extensive. The plans in place for Donald Sangster International Airport led to the finalization of construction activity and the commissioning of the terminal in April 2009 which was expanded to allow for more capacity for seating, loading, arrivals and customs. In addition there was increased apron area, allowance for runway maintenance and widening of access roads at the airport.

The other major capital expenditure project was road network construction which included the Northern Coastal Highway Improvement Project, Highway 2000, Montego Bay Bogue Road Improvement, Fern Gully Rehabilitation as well as several bridges across the island. During 2009, construction works carried out aimed at the:

• completion of Phase 1 of the Rehabilitation of the Fern Gully Roadway, and

• dualization of the Bogue Road between Reading and Fairview.

Construction work was completed on seven new bridges, while there was continued construction of four new bridges. Major expansion and reinforcement activity was planned for the Waterloo Road Bridge, that is expansion to four lanes, excavation, steel and concrete works, construction of an approach road, installation of guard rails and girders. Rehabilitation and new construction work was completed on the Northern Coastal Highway Improvement Project on June 30, 2009. In relation to Highway 2000, the 24 kilometre four lane dual carriageway from Linstead to Moneague Bypass was under construction which will be a toll roadway. Work was in progress on Phase 1B of Highway 2000 during the year. This began with land acquisitions and valuations for Sandy Bay to Four Paths and Four Paths to Williamsfield. 

Other construction and installation projects during 2009 included:

• Residential Construction by Private Developers and the Housing Agency of Jamaica (HAJ) included 2,130 housing starts and 3,454 housing completions. 

• Completion of the 1,309 Palmyra Resort and Spa, St. James; and the Goldeneye Resorts, St. Mary.

Proposed Projects

• Washington Boulevard Improvement Project slated for completion over 16 months to span 2.75 kilometres of roadway between Washington Boulevard and Dunrobin Avenue.

• A road work contract was signed for Comfort Castle, Portland.

• The Jamaica Road Development Infrastructure Programme which is a project jointly funded by the Governments of Jamaica and China for a US$398 million loan facility.

• The Falmouth Cruise Ship Terminal which after expansion should accommodate larger cruise liners with up to 5,400 passengers was in an agreement concluded by Royal Caribbean Cruises and the Port Authority of Jamaica. 

• Private development in Norbook, Kingston of a luzury apartment complex. The second phase was scheduled to begin in 2009.

• Continued construction of the Secrets Resort and Spa that is: Secrets St. James and Secrets Wild Orchid, both 350 rooms; and Gran Bahia Principe, St. Ann which will accommodate 600 rooms.

Other Performance Indicators

The total value of mortgages stood at J$20.3 billion in 2009. The total number of mortgages was 37.2 per cent lower, decreasing by 18.3 per cent from 10,465 in 2008 to 6,566 in 2009. The decline was attributed to the global economic recession, and as a result two agencies were mobilized to implement plans which could revive the housing sector. They are:

1. The Jamaica Mortgage Bank (JMB) made provision for mortgage financing by repackaging existing loans as mortgage-linked securities which were accessible to long tem investors.

2. The HAJ made a commitment to undertake 104 new housing starts in 2009 compared to none in 2008. The Agency disbursed 48 mortgages however valued at J$13.9 million in 2008. No mortgages were issued in 2009.

The National Housing Trust (NHT) made available up to $3.5 million to single applicants and $7.0 million to co-applicants on both the Open Market and NHT Scheme House Loan Programmes. Mortgage interest rates at the NHT ranged from 5 to 8 per cent for the higher income groups and 2 to 4 per cent for those with lower incomes.

The major financial institutions provided J$22.13 billion to the industry in 2009, compared to J$15.42 billion in 2008. A total of J$19.9 billion was obtained from commercial banks and J$2.2 billion from institutions licensed under the Financial Institutions Act. The major entities through which mortgage financing was available in 2009 were:

• Building Society loans which accounted for J$10.8 billion compared to J$22.35 billion in 2008;

• NHT loans which accounted for J$9.4 billion compared to J$10.4 billion in 2008; and

• JMB which disbursed J$401.5 million in 2009 compared to J$117.6 million in 2008.

The sector's output of several different types of construction materials decreased in 2009. Silica sand declined to 6.8 thousand tonnes; limestone to 1.9 million tonnes; sand and gravel to 2.6 million tonnes; marl and fill to 3.2 million tonnes and paint to 10,767 thousand litres. Cement output and export increased in 2009, output grew by 1.7 per cent, while cement exports increased from 28,142 tonnes to 88,205 tonnes. Output of Pozzolan increased by 6.6 per cent.

Policy Developments 

The formulation of the Construction Industry Policy continued into 2009, spearheaded by the Ministry of Transport and Works (MTW). It is expected to address major issues affecting the industry such as safety and security issues including extortion. The National Housing Policy being drafted through the Ministry of Water and Housing, was revised in 2009 and public consultations were held. The major issues examined were the legislative framework for housing, joint venture partnerships, squatter regularization, security of tenure, collaboration between housing and approval agencies and the secondary mortgage market. The completion of the new National Building Code in October 2009 would stipulate specific standards established at the international level and also incorporate existing building codes. The new Code detailed the suitable conditions for residential housing, plumbing, energy conservation, private sewage disposal and property maintenance. 

Installation 

Applications for inspection through the Electrical Division of the Ministry of Energy and Mining totalled 32,310 in 2009, and approximately 79.7 per cent, 25,753 were passed. The majority were domestic inspections. Water metres installed by the National Water Commission across the island increased by 18.8 per cent to 27,655 in 2009. The capital expenditure in the Telecommunications sub-sector was for installation and expansion activities on mobile communications network, to improve broadband services and VOIP.

Employment 

The sector recorded 96,000 persons employed during 2009. The total employed decreased when compared to the previous year, which totalled 108,900. The sharp decline was due to reduced activity which resulted from a decline in demand in the Building Construction categories.

Source: Economic and Social Survey Jamaica 2009 and The Gleaner, April 2, 2008 and May 20, 2009.