The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian contractors “cannot control prices” because quotes on building materials are holding for as little as 48 hours, with one saying yesterday: “It’s just the perfect storm.”

Stephen Wrinkle, a former Bahamian Contractors Association (BCA) president, told Tribune Business that “everything’s generally backed up” as a result of post-COVID construction demand in the US as well as the global supply chain crisis that appears to be worsening.

“Order 100 and you get 80. They say you will have it in four weeks, and delivery turns out to be ten weeks,” he said in summing up the situation. “It’s ongoing. I don’t know when it will work out. They say maybe after Christmas, but there’s a lot more consumption that has to be met. Low inventories and a shortage of workers has just created the perfect storm for us.

“The major projects and major importers will get the bulk of the orders, and the smaller projects and individual purchasers will be at the back of the line. We ordered materials in January and got them on-site in October. A three to four month delivery turned out to be ten months, so things are stretched.”

The construction industry has thus joined other sectors in having “to plan well ahead to handle shortages and delays”. Mr Wrinkle added that construction contracts being drawn up now for new-builds contain clauses and stipulations that exempt the contractor from cost-related liabilities “because we cannot control prices.

“We’re getting quotes that are only good for 48 hours from suppliers,” he added. “They used to be good for 30 days, and some were for 90 days. The consumer always has to pay, and the hardest hit people are going to be those with fixed mortgage contracts who have cost overruns. That will be the problem right there.

“We will feel this through the next Spring, summer. It will take a long time to shake out. Doors, windows, metals have all increased by 20 percent upwards, and it’s compounded by the fact we have to pay freight, insurance, duty and VAT on an increased price.

“It has a significant trickle down economic impact. I think we’ll see general price increases across the board here after Christmas. We just cannot afford to absorb it.”

However, Leonard Sands, another ex-BCA president, voiced optimism that the construction industry has sufficient building materials supplies in-country to take it through to year-end 2021. He attributed this to stockpiling by suppliers after cement shortages and other issues were encountered earlier this year, as well as the absence of hurricanes (so far) and the pre-holiday slowdown.

“For the next eight to 12 weeks, I don’t see any shortfalls are to be expected,” he predicted to Tribune Business. “I think why we have sufficient here is because while we had some disruptions earlier on in 2021, there was a recovery in purchasing by local suppliers here that augmented stocks in line with the work coming in, and we didn’t have the disruption of a hurricane so far.

“Right now our partners have supported us for the work we have going on. We do have ample construction going on in Abaco, New Providence, but we’ve been able to maintain a healthy supply of the raw materials we need. There have been no immediate threats to supplies of construction materials since.”

However, Mr Sands conceded that products with long-lead times, such as hurricane-impact windows and doors, and interior doors, which had five-six week delivery times attached pre-COVID were now taking “double the time” - between 12-16 weeks to arrive.

“You have to order a lot further in advance. I think suppliers and builders have realised they need to do that to make ordering as easy as possible, so they don’t get into a situation where they need something and cannot get it,” he added.

“We’re more towards the end of the year. Construction slows down after the next month, so we won’t have the same aggressive need for supplies. If it was in the middle of summer I would have some concerns, but where we are in the construction season I don’t think we should have anything to worry about before the end of the year.”

What happens in 2022, Mr Sands added, will depend on the global supply chain as well as the number of new construction starts that The Bahamas sees.