The benchmark most often used to
measure the future health of the Cayman Islands construction industry is
looking a bit anaemic, according to the latest government reports.
Planning Department records for
this year indicated that both the total number of construction project
approvals, as well as the value of that proposed construction, had “fallen
precipitously” when compared with the previous two years.
Project approvals deal with
construction work that has yet to start and are generally considered to be a
reliable measure of where the industry is going.
According to planning records, only
commercial construction project approvals increased in value between the first
six months of this year and the first half of 2009.
The value of apartment construction
approvals in the first half of 2010 fell by more than 75 per cent from the year
before, dropping from CI$100 million in mid-2009 to $23.4 million as of June
The total number of project
approvals has fallen steadily over the past several years, according to
planning statistics reported in the Economics and Statistics Office Semi-Annual
Project approvals in the first half
of 2007 were 647, in 2008 that number was 617; in 2009 it was 483; for the
first half of this year, project approvals fell to 436.
“Intentions for residential
construction softened with approvals for houses declining by 35.6 per cent (in
value),” the economics report noted. “Significant downturn was also recorded in
the apartment/condominium sector.”
The commercial construction
category provided a bright spot in an otherwise cloudy picture.
“Intentions rebounded from a year
ago to $79.1 million,” the report stated. “Large projects including the
on-going expansion of the Camana Bay development, a national art gallery and a
new commercial development accounted for $54.8 million (or about
three-quarters) of the total project approvals.”
Active building permits also
declined in the first half of this year. Residential construction, which
largely drove the market in 2009, started to evaporate this year.
Both home and apartment construction
saw a bit of a boom in 2009. From January through June of this year, that boom
receded, dropping below 2008 levels in both cases.
Current commercial building permits
rebounded from a sharp drop last year to slightly surpass levels seen in 2008.
This was credited to “a recovery in the commercial and industrial sectors” in
The Cayman Islands government had
embarked on no new building projects through the first half of this year,
planning figures indicated, a result of “continuance of public austerity