The T&T Con­trac­tors As­so­ci­a­tion (TTCA) has is­sued a strong warn­ing to its mem­bers and the wider con­struc­tion in­dus­try, say­ing that the re­cent spike in nat­ur­al gas prices is plac­ing se­vere strain on the sec­tor and threat­ens to desta­bilise on­go­ing and fu­ture projects across the coun­try.

In a news re­lease yes­ter­day, the as­so­ci­a­tion said the in­crease in nat­ur­al gas costs is not on­ly af­fect­ing con­trac­tors di­rect­ly but is al­so dri­ving up the price of key in­puts es­sen­tial to con­struc­tion.

Nat­ur­al gas is a ma­jor en­er­gy source in the pro­duc­tion of ma­te­ri­als such as ce­ment, glass, and steel—core com­po­nents for build­ing and in­fra­struc­ture de­vel­op­ment.

Not­ing that the con­struc­tion sec­tor is a sig­nif­i­cant eco­nom­ic in­di­ca­tor, which his­tor­i­cal­ly con­tributes ap­prox­i­mate­ly five to six per cent of GDP, the TTCA ex­plained, “We con­tin­ue to ex­pe­ri­ence ebbs and flows in the in­dus­try, as it is pri­mar­i­ly dri­ven by na­tion­al de­vel­op­ment projects and eco­nom­ic cy­cles. Stake­hold­ers are chal­lenged with project fund­ing con­straints, for­eign ex­change short­falls, and pay­ment de­lays.

“While re­cent years have seen pres­sure from en­er­gy sec­tor down­turns and re­duced large-scale projects, the sec­tor re­mains cru­cial for em­ploy­ment and phys­i­cal de­vel­op­ment. This in­crease is dri­ving up op­er­at­ing and ma­te­r­i­al costs. Un­for­tu­nate­ly, com­pa­nies are forced to pass on re­lat­ed costs to cus­tomers, ad­just mar­gins, and/or forced to con­sid­er pro­duc­tion cuts.”

The TTCA added that these added ex­pens­es com­pli­cate project fore­cast­ing and bud­get­ing, mak­ing it hard­er for busi­ness­es—par­tic­u­lar­ly small and medi­um-sized en­ter­pris­es op­er­at­ing un­der fixed-price con­tracts—to main­tain prof­itabil­i­ty, stat­ing that some com­pa­nies may be forced to ad­just their mar­gins, raise prices, or even con­sid­er cut­ting pro­duc­tion to ab­sorb the fi­nan­cial blow.

The as­so­ci­a­tion al­so ex­pressed con­cern about the sec­tor’s di­min­ish­ing ca­pac­i­ty to sus­tain em­ploy­ment lev­els.

“Con­struc­tion firms are un­able to ac­cu­rate­ly fore­cast project costs and bid for fu­ture, longer-term con­tracts. The added fi­nan­cial pres­sure from ris­ing costs, cou­pled with sup­ply chain dif­fi­cul­ties in­creas­es the risk of project de­lays and po­ten­tial busi­ness in­sol­ven­cies for many stake­hold­ers.

“Do­mes­ti­cal­ly pro­duced goods are be­com­ing less com­pet­i­tive com­pared to im­ports. While the con­struc­tion sec­tor re­mains a sig­nif­i­cant, non-en­er­gy em­ploy­er and boast­ed of cre­at­ing em­ploy­ment for a sig­nif­i­cant num­ber of per­sons, we have seen a grad­ual de­cline in the num­ber of avail­able jobs,” the TTCA added.

It un­der­scored the ur­gency of the sit­u­a­tion and the po­ten­tial im­pli­ca­tions for T&T’s broad­er de­vel­op­ment agen­da.

“With deep con­cern, the T&T Con­trac­tors As­so­ci­a­tion con­tin­ues to see an up­ward tra­jec­to­ry in rates and charges which com­pro­mise our sus­tain­abil­i­ty to ful­ly sup­port na­tion­al de­vel­op­ment,” the TTCA stat­ed.