Editorial 2009: ‘‘The construction sector plays an integral role in Grenada’s economy’’

The slump in the US and UK housing market is very challenging for the Grenadian economy, creating problems for many Grenadians living abroad who were planning to build their retirement home. Some are waiting for US and British housing markets to improve or the pound and the US dollar to strengthen before they can afford to invest in Grenada.
The world financial crisis has resulted in the loss of hundreds of thousands of jobs and this is definitely affecting the job market. A significant number of Grenadians employed in the automobile and construction industries in the United States and other parts of the world could be laid off if the rescue plans for those sectors fail.
If these workers lose their jobs, it will affect their ability to send remittances back home to support their families. The population of Grenada is around 110,000 but a considerable number of Grenadians work and live abroad.
The remittances from relatives working in the United Kingdom, Canada and the United States are a major contributor to Grenada’s economy. It accounts for as much as 5 % of Grenada’s GDP and has already declined by 20% in the first quarter of 2009. This will have a detrimental affect on the overall economy.
As the availability of credit dries up, local businesses are struggling to pay their employees and meet their overheads. Some workers are being laid off and some businesses are closing down all together. Unemployment here in Grenada is now over 30%.
The construction industry employs a large number of people and generates significant revenue for the country.
In my view and the views shared by a number of stakeholders is that, the stimulus package introduced by the Government in March 2009 was well received, but that a reduction in interest rate would assist homeowners and businesses, similar to that initiated by US President Barack Obama and other governments around the world.
Government also needs to come up with creative solutions to bring on stream some of the construction projects that were in the pipeline but are now experiencing difficulty accessing funds to get their projects started. The construction sector in the past ten years witnessed significant growth as a result of an increase in Grenadian nationals choosing to return to Grenada to build their retirement home and the government’s rehabilitation of the infrastructure after hurricane Ivan and Emily damaged 90% of the building stock in 2004/5.
During that expansionary period, the construction industry enjoyed strong demands for their services, enabling businesses to grow and in the process taking on loans to exploit the opportunities posed by the construction sector. Some businesses are now experiencing difficulties meeting their commitments to the bank as a result of the recession.
The construction sector plays an integral role in Grenada’s economy by creating work and providing thousands of much needed jobs. But the reverse will be the case in an economic recession, as business activities contract leading to a fall in demand for labour and building materials.
Obviously, the current financial crisis has affected virtually all areas of the construction sector; however many of the stakeholders are optimistic that the industry will weather this economic storm.

GUS ANDALL
CEO DESIGN CONCEPTS LTD