Home Real Estates Construction industry is gradually collapsing under economic hardship

Construction industry is gradually collapsing under economic hardship

Economics Construction Work
Economics Construction Work

The construction, and real estate industry in the country is gradually collapsing under the current economic hardship, Mr. Simon Sawer Tetteh, Managing Director of Sawer-Nanor and Sons Company Limited (SNS) has stated.

Mr. Tetteh, in an interview with the Ghana News Agency (GNA) in Tema on the effect of the economic meltdown on the industry, said most construction companies were either downsizing their workforce or shutting down completely as they could no longer cope with the repercussions of frequent and inconsistent price hikes.

He added: “The construction industry is hit hard by the current economic hardship, so as businesspeople either you are laying off some of your workers or trying to strategize to just break even or sometimes record a complete loss on a project.”

He stated that the increment in building materials was too astronomical explaining for instance that high tensile iron rods that was being sold at around GHs4,500.00 moved to GHs6,500.00, GHs8,500.00 and now selling at about GHs11,500.00 within a period of four months.

He added that cement has moved from below GHs50.00 to between GHs80.00 and GHs85.00 depending on the area it was being sold within the same period of four months.

The MD stated that “for instance, we are doing a project at Abetifi, and I can tell you that within a week, sand that we were buying at GHs1,800.00 moved to GHs2,500.00 and now GHs3,100.00 per 20 cubic trucks.”

He said chippings also increased over the period from GHs3,000.00 through GHS 4,500 and currently selling at GHs5,500, lamenting that, “these are astronomical increases that you cannot keep as a contractor, it has a huge bearing on the cost of the project.”

Recently we checked our books, and we realized that the variations alone are over 52 percent of the contract price you can imagine that if you are doing a project and such a huge percentage of cost must be added.

He said looking at the enormous difference in the cost of building materials which translates to more than 50 percent of additional cost in variations on a project, most of the works that they were handling had stalled as clients were unable to pay for certificates raised after works.

Mr. Tetteh indicated that the implication of that was job loss, and confusion between clients, workers, and contractors as it has become difficult to pay the salaries of workers as clients were yet to fulfil their payment requirement.

“I can tell you that a lot of construction companies are folding up, or they have downsized the number of workers; at this time laying people off is an exceedingly difficult thing to do, which is not easy for the employer.

“Workers are also asking for increments at the same time, the work itself is not there, we are in very trying and difficult times,” he stressed.

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