THE Planning Institute of Jamaica (PIOJ) expects the construction sector — a key driver of the economy — to decline for the third consecutive year in 2010.

The performance is predicated on the continued impact of the global economic crisis on the domestic economy, stated the PIOJ in its annual Economic and Social Survey Jamaica 2009 (ESSJ) published Monday.

The construction sector decline is in contrast to the 0.6 per cent GDP growth expected in 2010/11 fiscal year. The PIOJ did not quantify the expected decline in 2010 but it follows negative growth of 4.5 per cent in 2009 and negative growth of 6.7 per cent in 2008. “However the downturn will be tempered by planned road construction in the short to medium term,” stated the PIOJ.

The survey stated that the rehabilitation of the Palisadoes Road and the expansion and upgrade of port facilities at Gordon Quay and Fort Augusta along with the continuation of the Bushy Park to Moneague Toll Road would increase demand for limestone, marl, fill, sand and gravel. They added that the sector would benefit from the five-year US$465 million ($41.6 billion) road-improvement project under the Jamaica Road Development Infrastructure Programme.

The project will be jointly funded by the GOJ and Chinese government through a US$398-million loan facility, the ESSJ stated.

The Chinese are the latest to invest heavily in Jamaica following a series of investments by the Spanish and French in the last decade, in a bid to revive the stagnant economy. But the latest data offer little promise for growth. Last month the Incorporated Masterbuilders Association of Jamaica (IMAJ) wanted the Government to impose a minimum quota for local employment in mega projects by overseas contractors. The association asserted that local labour and capital continues to be underutilised in projects, especially those funded by the Chinese government. It results, according to IMAJ President Raymond Cooper, in underemployment for the sector and prevents technology transfer.

In 2009, most of the major performance indicators for the construction sector declined. Specifically, the number of housing starts by state agency National Housing Trust declined 27.7 per cent from 2,368 to 1,711. Total Housing starts inclusive of private contractors declined 46.4 per cent from 3,973 to 2,130. Total mortgages fell 37.3 per cent from 10,465 to 6,566. Total value of mortgages fell by 38.6 per cent from $33 billion to $20.3 billion. Employment declined 11.6 per cent from 109,000 to 96,000.

The sector however benefited from a 1.7 per cent increase in cement production to 736,900 tonnes in 2009 but this was still far below the 844,000 tonnes produced in 2005. The sector also benefited from a 54 per cent increase in commercial bank loans and advances to the sector at $19.9 billion in 2009 versus $12.9 billion in 2008.