The Balearic Builders Association has been discussing the government’s land planning decree at its general assembly, concluding that it will push the construction industry back into recession in 2017 and mean job losses and business closures.
Its president, Eduardo López, re-elected at the assembly for a further four-year period, was particularly critical of the government’s attitude: “It will curtail the recovery process in the building sector. It is illogical to take measures which only succeed in frightening away investors and creating a feeling of legal uncertainty in the Balearics.”
In stressing that businesses in the sector had been annoyed at a lack of dialogue and attempt to reach consensus, he added: “You cannot change planning regulations in such a hidden and treacherous way, especially when productive sectors are going to be affected, not only construction businesses. The suspension of projects will cause activity in the sector to plummet within twelve months and produce negative consequences.”
López called on the government to act with transparency and not opacity and said that he couldn’t understand the government’s strategy. “It’s like putting a spoke in the wheels of a dynamic sector that is interrelated with other productive sectors. The impression is given that the government believes that employment will be created just like that. The decree will do the opposite in terms of incentivising and boosting the regional economy.”
Recovery in the sector had started in 2014 and was consolidated last year, but López warned of renewed downturn. “We are now entering a new period of low business activity that will lead once more to recession, just as it was from 2007. The measures adopted by the government are no less understandable than how they might wish to explain how to minimise their impact.”
On delayed payments to constructors who are government suppliers, López was blunt: “The government will be responsible for businesses which fail because of delays in payment, when, in this regard, it had recovered a reasonable way of easing business income and liquidity.”