'Number of factors' affecting building industry

Several firms have gone bust in Jersey in the last few years

There are a number of factors affecting the construction industry in Jersey, business owners have claimed.

The Jersey Construction Council and the Chamber of Commerce have cited factors such as the cost of raw materials, rising interest rates, fewer capital projects from government, and a slowing down in the housing market.

Ben Cairney, from Ashbe Construction, said he was optimistic the sector would experience growth "in the next 12 to 18 months".

The Government of Jersey said a number of initiatives would give "greater clarity and certainty to the construction industry".

Ben Cairney said he was hopeful the sector would grow in the next 18 months

In the last three years, nine construction firms have gone bust or ceased trading in Jersey.

Mr Cairney said there were a number of factors currently affecting the industry.

"The pipeline of work that has been talked about is starting to get a bit of traction," he said.

He said he thought companies needed more communication with government so they knew when big projects were going live - allowing them to plan ahead.

"We don't have a crystal ball so it's really hard to forecast..." Mr Cairney said.

He added: "We need to know when things are coming online and we need to stick to those dates for us to be able to adequately resource it and not take on too many staff too early..."

'A lot of moving parts'

While Mr Cairney said the blame for the downturn in the construction industry could not be laid solely at the government's door, he said there were things which could be done to ease pressure on businesses.

"The industry can't rely solely on government work," he said.

"There's a lot of moving parts in construction and sometimes mismanagement can have an effect, sometimes the speed at which payments are made...and sometimes disputes can have an effect and it's all about where the risk lies," he said.

"I don't think that the government helps when they introduce things like the 3% stamp duty on buy-to-lets."

Mr Cairney said he thought the removal of the 3% stamp duty would "give developers and builders more confidence" to start new construction projects.

His concerns were echoed by Alex Wareham from AA Scaffolding Solutions - who said the challenges facing the sector had affected his company.

In less than three years, nine companies in the island have gone bust, leaving hundreds of people out of work and sub-contractors out of pocket.

"In the last 18 months, with people going down and companies folding, we have lost probably £300,000, which we can't get back," Mr Wareham said.

"We've got rising interest rates, we've got wages going up, profit margins going down," he added.

Alex Wareham from AA Scaffolding Solutions said he thought the island needed more building yards

Mr Wareham said there were very few building yards on the island, and said this meant builders could not bulk buy and store materials to help keep costs down.

"Everything is imported to the island so freight costs have nearly doubled...and there is no storage," he added.

Mr Wareham said he thought the island's planning department also needed to make its system more efficient.

The government said in a statement: "We know that the industry wants clarity around the pipeline of major projects."

It said ministers were working to deliver that clarity through four initiatives including the Construction Hub Strategic Board, a forum for the industry and government "to address issues such as emerging capital projects, procurement, regulation, and training".

Other initiatives such as the Island Construction and Engineering Programme (ICE) would "help co-ordinate the flow of projects by government and bodies such as the Ports of Jersey and the States of Jersey Development Company".

"The Investing in Jersey Strategy, which will ensure long-term investment in Government infrastructure is sustainable, coordinated and transparent," it said.

The Jersey Capital Investment Fund would also "provide a consistent and predictable source of funding for the next 25 years", it added.

"While some of these initiatives are subject to budget approval, they should bring greater clarity and certainty to the construction industry," it said.