Palma.—Construction companies in the Balearics said yesterday that the unwillingness of banks and financing organisations to lend money is directly responsible for the delay in the recovery of the building industry
Gabriel Oliver, President of the Balearic Builders Association said that the property building sector now won't see a recovery until at least next year. It will certainly not be in the second half of this year as had been originally forecast.

Oliver said that the stockpile of unsold property in the region is gradually reducing although there are still some 3'000 homes still without owners. He explained that there are already some companies who would be in a position to embark on new projects if they could only find a financial backer.

Oliver claimed that the majority of companies already had the land and necessary permits from local government ... all that's stopping them from going ahead and creating jobs at the same time is cash flow.

The Builders Association said that the unwillingness of banks to lend is attributable to the current policy of the Bank of Spain to stop the country's banks and lenders avoiding any kind of risk situation. “We have no choice but to wait until the economic situation improves,” said Oliver.
He added that apart from cash flow difficulties, the construction industry is also hindered by the slow turning wheels of local government bureaucracy, and the fact that the necessary legislation for providing permits to build on urban land were just not being produced. This means that even were a constructor to secure appropriate financing, the delay in a project going ahead for planning reasons could prejudice the success of the housing scheme altogether.

Oliver said that a good number of the building programmes which have already been drawn up architecturally need special treatment to adapt them to current bylaws.

He claimed that the only building being carried out at the moment are small, occasional developments of single family housing units.
The latest figures from Central Government's Employment ministry for May show that 16'262 people in the Balearic construction industry are on the dole.