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Construction industry wages plunge 11%

Construction slump: Even with the ongoing work on the new hospital, construction sector employment income fell 10.9 percent in the first quarter

Employment income generated by the construction industry plunged by almost 11 percent during the first quarter of this year, as the amount of building work being done fell sharply in the first three months of the year.The figure was revealed in quarterly economic data from the Department of Statistics which show the Island saw a 4.2 percent decline in Bermuda’s employment income in the first three months of the year — the third successive quarter of year-over-year decline in the total amount of wages and salaries paid out (see page one).Despite the work going on at the new King Edward VII Memorial Hospital, the recession bit construction workers particularly hard, with the industry paying out $27.6 million to employees, down from $31 million in the same period last year.The sharp shrinkage of the construction industry means its wage contribution has declined to 3.2 percent of the Island’s total employment income, as opposed to nearly six percent three years earlier, when construction workers took home more than $46 million.The estimated value of construction work put in place during the quarter was $21.5 million, down 44.6 percent from a year earlier, and the lowest figure since the fourth quarter of 2009.It is a far cry from the peak of the construction boom in the first quarter of 2009, when $145 million of work was put in place.More than $20 million of the decrease in employment income came in the highest-earning sector, international business, in which wages and salaries totalled $331.67 million in the first quarter, a fall of 5.9 percent from the record high of $352.57 million in the first quarter of 2011.Employment income held up well in some areas, notably banking, insurance and real estate, which recorded a 0.2 percent rise to $98.05 million, and wholesale and retail, which remained flat at $50.45 million.The hotels and restaurants sector saw the biggest year-over-year rise of 3.7 percent in employment income, but from a historically low level in the first quarter of 2011. Hospitality businesses paid out $14.62 million to employees in the first quarter, compared to $14.1 million in 2011. However, this year’s total languished at half the level of the same period in 2004 and made up just 1.7 percent of the Island’s total employment income.Business services employment income fell 6.8 percent, transport and communication 8.3 percent and public administration and defence 2.5 percent.Diane Newman, co-chair of the Bermuda Chamber of Commerce Economic Advisory Committee, noted some concern about the areas where jobs had been lost between 2009 and 2011, data also detailed in the statistics.“The biggest loss of jobs was in construction, with 939 jobs, or a nearly 27 percent decline,” Ms Newman said. “Construction is one of the largest employers of Bermudian males, so the effect of this is a major concern.“Senior officers, managers and professionals numbered 570 fewer from 2009 to 2011, about four percent less — and these would be the highest-paid white-collar jobs in private industry. Clerical jobs also declined over the two years by 246 jobs or about 3.8 percent.”She also noted a significant increase in a sector traditionally dominated by public-sector workers over the two-year period.“Public Administration declined by 34 people from 2009 to 2011, less than one percent, but Education, Health and Social Services, which likely includes a large number of public servants, actually rose by 271 jobs, or 7.5 percent.”