Jamaica Construction Sector Contributes 10 Per Cent of GDP and Posts 1.4 Per Cent Growth in 2025 as Housing Pipeline Expands

Kingston, Jamaica — 20 November 2025

Jamaica’s building and construction sector contributes approximately 10 per cent of gross domestic product and employs thousands of workers in formal and informal capacities, according to data from the Planning Institute of Jamaica and the Statistical Institute of Jamaica. The sector posted output growth of 1.4 per cent in the first quarter of 2025, contributing positively to Jamaica’s broader economic expansion of 1.1 per cent year-on-year in that period — a rebound from a 0.8 per cent contraction in the fourth quarter of 2024 that was attributed in part to weather disruptions and supply chain pressures. The construction sector’s performance in 2025 reflects the cumulative effect of multi-year public and private investment commitments that were translating into actual ground activity: government affordable housing schemes, NHT developer partnerships, private apartment and townhouse developments in Kingston and the north coast, and the expansion of commercial and logistics real estate driven by Jamaica’s growing role as a transshipment hub.

Construction as an Economic Multiplier

The construction sector’s economic significance extends well beyond its direct GDP contribution. Construction activity in Jamaica generates backward linkages to building materials supply (cement, steel, lumber, tiles, plumbing, electrical), forward linkages to real estate services (valuation, legal conveyancing, mortgage financing, insurance), and direct employment across skill levels from unskilled laborers to master craftsmen, project managers, and civil engineers. Every residential unit completed generates activity across multiple other sectors before the first homeowner takes possession.

The construction industry’s labour intensity is particularly significant in the Jamaican context, where formal employment generation remains a policy priority. Unlike capital-intensive sectors where output growth does not necessarily translate to proportionate job creation, construction activity maps closely to employment: more units under construction means more workers on site. The NHT’s pipeline of 19,575 housing solutions under its two-year plan, the HAJ’s ongoing schemes, and the private sector’s major developments represent a sustained employment base for the sector through the mid-2020s.

Skills and Labour Agreement

The construction sector’s expansion has been accompanied by a renewed focus on formalization and worker welfare. A collective labour agreement for the building and construction industry was concluded between the relevant industry stakeholders and worker representatives, establishing standardized wage rates and conditions for the sector. The agreement represents a structural improvement in the construction labour market — one that, over time, is expected to attract and retain more skilled workers who might otherwise leave for tourism or other sectors, and to reduce the informality that has historically made it difficult to quantify the sector’s true employment contribution. Formalizing construction employment also improves access to NHT contributions for construction workers, many of whom work in project-based arrangements that previously made consistent NHT registration difficult.

The sector’s skills shortage — a persistent challenge identified in multiple industry surveys as a constraint on the pace of housing delivery — remains a concern. Specialized trades including plumbing, electrical, tiling, and masonry are in short supply relative to the volume of construction activity underway, and the lead time required to train workers in these trades means that the current shortage will not be resolved quickly. The collective labour agreement, by improving conditions and certainty of pay, may help attract workers who had left the sector, but structural training investments over the medium term remain necessary to close the gap.

Materials and Cost Pressures

Construction output growth in 2025 occurred against a backdrop of materials cost stabilization after the sharp increases of 2022 and 2023. Cement prices, a key input cost in Jamaican residential construction, stabilized following the government’s approval of supplementary cement imports in 2024, which addressed the supply shortfall created by domestic production constraints. Steel and lumber prices also eased from their peak levels, providing some relief to developers who had been absorbing significant cost increases. The stabilization of input costs improved project economics for developers and, in some cases, allowed price reductions or product value improvements for buyers — a welcome development in a market where construction cost escalation had been squeezing the supply of affordably-priced new units.

“The construction sector and the housing market are the same story told from two angles,” said Dean Jones, Managing Director of Jamaica Homes. “When construction is active, housing supply grows, employment grows, and the multiplier effect reaches every parish in Jamaica. The 10-per-cent-of-GDP figure is the headline, but what it represents underneath is hundreds of projects, thousands of workers, and a pipeline of homes that will house Jamaican families for decades. The sector’s 1.4-per-cent growth in early 2025 is real progress. The question now is whether we can sustain that pace and whether we can train enough skilled workers to keep up with what the pipeline requires.”