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Value Of Construction Permits Down 37.8%

Latest Planning Board numbers point to slowdown in construction activity during first half of FY 2002


February 28, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

According to the latest Planning Board statistics on Puerto Rico’s construction industry, total value of construction permits during the first five months of fiscal year (FY) 2002–July to November 2001–experienced a drastic 37.8% decrease when compared to same period for FY 2001 (July to November 2000).

The local government’s fiscal year runs from July 1 to June 30th.

Based on data prepared by the Planning Board for Gov. Sila Calderon’s recommended FY 2003 budget report, total value of construction projects during July to November 2001 amounted to $884.1 million, which is $538 million less than the $1.4 billion reported for the same period in FY 2001–a whopping 37.8% decrease.

According to industry sources, these numbers confirm what many in the industry have been saying all along–that there was a slowdown in the construction activity during the second half of 2001.

Meanwhile, total value of construction investment for FY 2001 reached $6.797 billion, a 0.8% drop when compared to FY 2000’s $6.849 billion, a decrease of $51.6 million.

Private sector dominates

The report further indicates that the drop in total value of construction projects during FY 2001 came from the public sector. Although it was responsible for $2.498 billion in projects, this sum is $97.1 million or 3.7% less than FY 2000’s $2.595 billion.

Government agencies most affected were the Department of Transportation & Public Works and the Highway & Transportation Authority, which jointly reduced their investment by $226.9 million or 31.6% in FY 2001 with respect to the previous fiscal year, the report says.

Private sector construction projects during FY 2001 amounted to $4.299 billion, surpassing FY 2000’s record of $4.254 billion by $45.5 million (1.1%).

Construction jobs remain flat

During the first six months of FY 2002, the total number of construction jobs (salaried and non-salaried) was 86,100, experiencing a 0.4% drop when compared to same period in FY 2001 with 86,500.

The small 1.1% increase in private sector investment, along with the relatively flat growth in overall construction jobs, and the decrease in public-sector spending serve as proof of the slowdown in construction activity during 2001, industry sources pointed out.

On a positive note, salaried jobs in construction experienced a 2.1% increase, adding some 1,500 new jobs to the industry during the said period.

Salaried construction jobs between July and December of 2001 came to 72,500 versus 71,000 during same period in 2000, the report indicates.

Cement sales down

Without giving specific numbers, the Planning Board’s report states that cement sales reflected a decrease during the same period (July to November 2001), although they still remained strong. An average of 3.5 million 94-pound cement bags were sold each month.

This figure, the reports says, compares favorably with sales registered during the beginning of the 1970s, when there was a boom in construction which created a high demand for housing, especially apartments.

Planning Board projections

The Planning Board’s construction activity survey for the first six months of FY 2002 (July to December 2001) anticipated construction projects with a total value of $ 3.502 billion, a 2.6% or $90.4 million increase over same period in FY 2001.

This growth, the survey states, is mainly due to public sector projects amounting to $1.646 billion for a 37.7% increase. As for the private sector, the Planning Board anticipated $1.856 billion in projects, a 16.3% decrease when compared to same period in FY 2001.

This Caribbean Business article appears courtesy of Casiano Communications.
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