The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian contractors may suffer up to “a ten percent bottom line hit” due to supply chain disruption during the COVID-19 lockdown, an ex-Bahamian Contractors Association (BCA) chief said yesterday.

Leonard Sands, pictured, told Tribune Business that contractors will have to “absorb” any loss of productivity caused by late building material deliveries to job sites as a result of the restricted opening hours and sales mechanisms imposed on hardware stores.

While the government has allowed the construction industry to operate from 7am to 5pm on weekdays, and for a half-day on Saturdays, hardware stores have only been allowed to offer their services on Monday, Wednesday and Friday via the Internet, curb side pick-up and delivery.

This, Mr Sands conceded, had resulted in supply chain delays, but he added that he did “not want to make too much of the issue” given that contractors were just grateful that the government had continued to allow the sector to function during the second national COVID-19 lockdown.

Emphasising that any cost increases would be borne by the contractor, and not result in price hikes for developers and clients, Mr Sands said of the supply chain: “There is impact. If I want a delivery done it can only be done those days they [hardware stores] are open. I can only receive the delivery; I cannot have persons on the road.

“I don’t want to make the situation sound worse than it is, as all of us appreciate that construction is open. The industry is incredibly appreciative. But on the procurement side we can all appreciate there’s a disruption that impacts the bottom line.

“If things take longer to get to the site they take longer to get used because of the delay in getting here. Contractors can expect to spend more money on manpower costs to get the job done, but it’s still way better than not having any work at all. We are still more fortunate than other industries by far.”

Mr Sands told Tribune Business that the construction industry will “readjust quickly” to the new supply chain realities, and argued that the impact to contractor revenues and profit from the delays and lost productivity was likely to be minimal.

“I don’t think they will take on more than ten percent,” he added. “I don’t see a more than ten percent hit to the bottom line. They’ll adjust quickly to bulk orders. There will be a loss of productivity but it will not be significant.

“The job will not cost more. It is the contractor that will lose more money from their bottom line. It’s a front-loaded cost. He’s going to absorb it. All in all it’s not that bad. It could have been worse.”

Mr Sands, describing construction as the “third pillar” of the Bahamian economy, reiterated that it was vital the sector continued to operate as it soaked up both semi-skilled and unskilled labour while providing weekly pay cheques that were spent directly in multiple communities via ‘Mom and Pop’ stores.

“There are a number of large projects going on that need to keep going on and rolling, and bringing in income and paying salaries to generate direct spending,” Mr Sands added. “We need money to keep going back into the domestic economy, and that happens every seven days. It’s critical given where we are now.”