THE construction industry remains depressed and although unemployment in the sector has dropped from its high of 293 in January to 249 in March it remains at 8.3% of the 3,000 direct employees in the industry.  

The Isle of Man Government remains the construction industry’s largest customer and represents 70% of construction expenditure here on the Island. The Government Capital Programme for construction was maintained in the 2010/11 Budget at ?66 million.

The average percentage spend of the Capital Budget is 61% over a 16 year period. The Capital Projects Unit of Treasury has stated that 90% spend will be achieved this year, which is welcomed by the industry.

The industry’s architects, engineers and quantity surveyors report that their “drawing boards” are not busy and the effect of this will be felt in six to nine months, suggesting that the industry will be depressed for some time to come.

On the positive side, demand for the industry’s services on smaller contracts has shown a slight improvement recently.  The volume of building materials used is regarded as an indicator of the level of construction activity.

Certain key materials are entirely imported into the Island and may thus give a fair indication of the level of subsequent demand and hence construction activity.  Imports are monitored through ports by the Department of Infrastructure, and tonnages of certain materials recorded.

Volumes of imported construction materials have been substantially lower during the past year than for comparable dates during earlier years. However, the most recent figures for imports during March show a significant increase in cement importation over recent months. Whilst an increase for one month is not a reliable indication of an upturn, it is hoped that the trend will continue.   

The Department of Economic Development has entrusted the Government’s List of Approved Contractors to the Isle of Man Employers Federation. The “List” will be incorporated within the new Accredited Construction Contractors Scheme.

The new scheme will place emphasis upon contractor’s performance in areas such as workmanship, financial performance and customer feedback, and encourage good practice by small contractors and instil confidence in the industry from its clients.

The scheme is managed by a board comprising representatives from the Department of Economic Development (DED), the Treasury, the Office of Fair Trading and the Construction Industry.

The industry will remain depressed throughout 2010. Confidence in the economy is required to stimulate private investment into the industry. Reliance upon Government as the largest customer for a sector of the economy is not healthy for Government or the sector.

The construction sector has been a valuable source of employment opportunities for young people, taking on large numbers of apprentices and trainees.  The number of apprentices has held up well to date, but the DED is concerned that a prolonged decline in the sector’s fortunes could result in falls in apprentice and trainee numbers at a time when employment opportunities generally for young people are likely to remain scarce relative to the growth period to 2008.