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"This may not be the end of business failures in the sector"

Friday 04 October 2024

"This may not be the end of business failures in the sector"

Friday 04 October 2024


Industry experts have criticised the Government for failing to support the island's struggling construction industry following the collapse of four local businesses in the last 18 months.

Mitchell Building Contractors, which has been operating in Jersey for 14 years, ceased trading on Wednesday.

The collapse led to the loss of 33 jobs.

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Pictured: Harvey Mitchell is the Managing Director of Mitchell Building Contractors, which ceased trading on Wednesday.

Speaking to Express yesterday, Managing Director Harvey Mitchell cited a "broken planning system with ill-conceived policies" and "spiralling labour, plant and material costs" as key factors in the company's decision.

The closure follows the insolvencies of Kalmac, MAC Energy, and Eden Interiors in July – as well as the collapses of Camerons and JP Mauger last year.

The Chamber of Commerce, which represents the island's business leaders, has warned that this trend could continue unless the Government steps in.

Simon Matthews, Chair of the Chamber's Building, Housing and Environment Committee, said the organisation had repeatedly warned the Government about the difficulties facing the "island's fourth largest sector" but that these warnings were ignored.

He said: "Jersey Chamber has called in the past on the Government of Jersey to intervene.

"However, rather than heed these calls and respond with a firm action plan and measures to support employees in the island's fourth largest sector, they have instead failed to take any decisive targeted action.

"Our worries, therefore, are that this may not be the end of business failures in the sector."

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Pictured: Major building contractor Camerons stopped trading with immediate effect last year.

Mr Matthews highlighted several Government actions he believes have worsened the industry's challenges, including plans to raise the minimum wage, removing apprentice wage reductions, and increasing costs for second homes and home purchasing.

He argued these measures have added to the burden on a sector already struggling with high interest rates and inflation.

While acknowledging the Government's recently announced Infrastructure and Construction Pipeline as a positive step, Mr Matthews argued that concrete action is still lacking.

"We still aren't seeing many spades in the ground and projects out to tender for the remaining contractors in the local construction industry," he said.

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Pictured: Simon Matthews is the Chair of the Chamber of Commerce's Building, Housing and Environment Committee.

The Chamber is now urging the Government to take immediate steps to stabilise the sector.

These include launching a list of "shovel-ready" projects that will go out to tender in 2024 and 2025, providing a support package for small and medium-sized businesses affected by the wage increases, and streamlining the planning and building permissions processes to accelerate new developments.

Mr Mathews said: "Now is absolutely the time for the Council of Ministers and their Government to step up to the plate, and deliver on this role.

"We need a clear action plan that will help 'Get Jersey Building' again, with a focus on supporting local businesses and ensuring the industry has the resources to survive and thrive."

Express has contacted the Government for comment.

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