Increase in construction activities noted

The Northern Marianas economy witnessed a significant growth in the construction sector, with the Department of Public Works issuing permits for close to $10 million worth of activities in the industry during the second quarter of the year.

An economic report compiled by the Central Statistics Division of the commerce department disclosed 82 building permits were issued by the DPW in the period covering April to June 2000, an improvement of close to 14 percent from the previous quarter’s 72 permits.

Activities in the construction of commercial establishments pushed the sector’s growth in terms of dollar value by over 150 percent to $8.5 million in the second quarter from the previous period’s $3.2 million.

The CNMI is set to witness construction of about 32 commercial establishments amounting to $6.5 million, whose permits were issued by the public works department between April and June 2000, the Quarterly Economic Review revealed.

In the first quarter of the year, 26 building permits for construction activities worth $1.7 million were released by the DPW in the commercial sector.

Construction activities in the residential sector were mainly focused at renovation and remodeling of the units, officials said. During the period under review, 50 permits were issued by the DPW for about $2 million worth of construction activities.

This represents a slight growth of about $0.5 million from the year’s first three months of 46 construction permits which entail only about $1.5 million worth of activities in the residential sector.

After contributing almost $100 million in total funds circulating around the CNMI economy three years ago, the Northern Marianas construction sector suffered a record blow falling beyond the $20 million-mark by end-December 1999.

Officials attribute the decline to the staggering number of new investors in the CNMI and the approach taken by existing businesses which have decided to forego expansion due to weakening consumer confidence amid the recession.

Construction activities on the island amounted to only $18.5 million, which translate to 361 building permits approved by the Department of Public Works’ Safety Code Division last year.

Of this, $5 million were earmarked for commercial construction activities while the remaining $13.5 million were primarily used to finance home or residential improvements.

In 1998, the industry pumped $48.3 million into the CNMI economy for 587 construction activities, majority of which were also concentrated in the residential sector.

The construction sector started spiraling downward in 1997 when total amount of activities fell to $65.2 million from the previous year’s $90.4 million, when erection of commercial structures outnumber activities in the residential sector.

The construction industry started dipping since then, until it reached a record-low of $18.5 million last year, from the year-ago’s $48.3 million, according to statistics obtained from the public works department.

Department of Commerce records revealed a shrinking pattern in construction activities in the islands since the first three months of last year, as the quarterly average of building permits dropped to less than a hundred from 141 in 1998.

This, even when private financial institutions in the CNMI expanded their lending base for real estate loans beginning the first quarter of 1999, ending the year with a total of $53.4 million approved loans.

The construction industry received a major boost in 1997 spurred by new activities totaling 463, which is higher than the previous year’s 343. New construction activities jumped higher in 1998 with the BSC issuing 564 new building permits.