MARKET constraints, higher material costs in comparison to other jurisdictions and a “marked level of consumer dissatisfaction” are among the draft findings of a review of Jersey’s construction sector by the Island’s competition watchdog.
The Jersey Competition Regulatory Authority has said that, following consultation, it will be considering whether it needs to take action to ensure “lower prices, increased quality and innovation”.
The construction industry is one of the Island’s largest, representing around 10% of Jersey’s workforce and over 7% of its total economic output.
However, the sector has seen the collapse of a number of firms – both large and small – in recent years.
K-Land Construction ceased trading with immediate effect in January, while Kalmac, MAC Energy and Eden Interiors – all part of the MAC Group – folded last year, citing a “downturn” in the housing market.
This followed the collapse of building firms Camerons and JP Mauger in 2023.
The JCRA said analysis and stakeholder feedback stemming from its review, which started in September, indicated that “the cost of materials and inputs is higher than in other jurisdictions”, and that the sector faces “several market constraints impacting efficiency and competition”.
It noted the government held a “central role” as a driver of demand “and as a participant on the supply-side”.
The competition watchdog also highlighted that “extensive engagement” with consumers and businesses had revealed “a marked level of consumer dissatisfaction with the sector”.
It cited feedback from 75% of survey respondents who believed there was “a lack of healthy competition”, resulting in “unreliable service, high and inconsistent pricing and poor outcomes”.
“Following consultation, the authority will assess whether it needs to use any of its powers to ensure that the Island receives the full benefit of competitive construction markets – lower prices, increased quality and innovation,” the statement continued.
“Action taken may include further market studies, increased outreach to the sector, warning letters or, ultimately, enforcement action. Penalties for breaching competition law include financial penalties up to 10% turnover for a period of three years so its important construction companies are aware of their responsibilities within the competition law.”
Commenting on the draft findings, JCRA chief executive Tim Ringsdore said the review marked “the start of our engagement in this important area”.
He added: “Consumer sentiment is broadly negative, and while Island constraints play a key role in sector outcomes, competition is not as effective as it could be.
“Through the review and future work, we will pinpoint areas affecting competition, and will continue to work with consumers, industry and government to help deliver improved competitive outcomes.”
A consultation on the draft findings, available on the JCRA website, is open until 16 May – after which point the regulator will consider the responses received and then issue an update on its next steps.
