The island’s Enterprise Minister has conceded conditions are difficult for the construction sector amid questions over a Castletown housing development.

Tim Johnston told Tynwald this week the government was ready to help the struggling industry which is facing rising costs and a slowdown in demand.

He was responding to a question from Arbory, Castletown and Malew MHK Tim Glover who asked the minister what issues are being experienced by the construction sector and if he will make a statement.

Mr Johnston said: ‘The construction sector is an important part of the economy, employing over 3,000 people. But it has gone through a period of high inflation which has driven up costs

‘In recent months the department has become aware of concerns in a slowdown in the sector with a large number of businesses identifying a slowdown in projects both large and small.’

Mr Johnston said there were a number of projects in the planning pipeline but conceded having planning approval does not necessarily mean the schemes will go ahead.

He added: ‘While the current rate of inflation has returned to relatively low levels the underlying increase in raw material costs and labour costs will have a direct knock-on effect on the cost of developments.

‘The government’s own capital programme is also behind forecast and a number of local authorities are also slower at progressing their plans.’

The government is working with Construction Isle of Man to better understand the current situation and what action the government might take, Mr Johnston explained.

He added: ‘While the appears a level of slowdown, there a number of large projects at the critical final stages of the infrastructure scheme to help developers with the viability of projects to stimulate the market.

‘We understand there maybe increasingly difficult times ahead, particularly for the smaller operators in the sector.’

He added that four large projects as part of the scheme have progressed to the planning stage which represent over £90m of private sector investment into the island. There are also inquiries from smaller projects for the second year of the scheme.

Mr Glover asked the minister about the Meadows development near Janet’s Corner in Castletown, which was being built by Haven Homes.

Mr Glover said: ‘I visited the estate during the summer and found that building has stopped there, there are a number of roads with Ironworks still up. The estate is not finished, and indeed, a number of the houses at the back of that estate have not even been started.’

He asked Mr Johnston what was happening with the estate and Haven Homes.

But the minister said: ‘I am not in position to talk about a specific business.

‘My understanding is that there will there are contingencies in place. We shall hopefully see that development continue, but I cannot comment any further on that at this stage.”

Mr Glover said that that government should be letting homeowners who are making considerable financial investments ‘aware of what the situation is’.

He explained: ‘I am told that a new contractor will be in place to finish off the estate in January of next year, to finish the 96 homes. Would that not have been a more helpful answer for the Minister to give?’

Mr Johnston responded by saying: ‘If at some point they come forward to reach out to us and talk to about an issue, then that’s, that’s, that’s fine, and we will obviously have that conversation.’