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Puerto Rico’s construction industry facing challenges in recovery process

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The island’s construction industy continues to face challenges that could affect reconstruction efforts and the government’s ability to maximize the potential of federal funds available for repairs related to the 2017 hurricanes and 2020 earthquakes.

Umberto Donato, president of the Puerto Rico Chapter of the Associated General Contractors of America (AGCPR), said during the group’s monthly luncheon “although we’ve seen progress in certain important areas, the industry continues to experience challenges such as labor shortages and inflation in the costs of building materials and payroll.”  

The construction sector projects that over the next few years, the industry could need up to 100,000 people to carry out much anticipated reconstruction work. This represents an addition of more than 60,000 positions to the roughly 30,000 that jobs that currently exist.

“We look forward to attracting new generations of men and women in Puerto Rico to join the construction industry and make their mark,” Donato said.

Another matter of critical importance is the rise in the cost of building materials and payroll, he said.

The AGCPR believes that inflation means less resources available to rebuild Puerto Rico, and higher risks for construction companies entering contracts under price structures that are constantly changing.

“There’s an urgent need for us to take action to address the factors we can control at the local level,” Donato said, noting that the government should evaluate proposals to establish adjustment clauses in contracts used by local government agencies, like the mechanisms that exist in federal contracts. Regarding the increase in payroll costs, AGCPR recommends carefully analyzing the risk posed by labor contracts in construction projects, which could “significantly increase construction costs, limit the ability of local businesses to execute works on the island, and further slowdown of the reconstruction processes,” he said.

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This story was written by our staff based on a press release.
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