Since the 1990s the government in St. Lucia has tried to build up a manufacturing sector as an alternative to the reliance on bananas and tourism. The island's population is too small to support the manufacture of goods for domestic consumption (St. Lucia's citizens cannot afford to buy expensive manufactured items), so the emphasis has been on export-oriented products such as garments, sporting goods, toys, and diving equipment. Most of the larger factories are situated in an industrial park near the container port at Vieux Fort, for the easy transportation of goods off the island. In 1996 the manufacturing sector was badly hit when 3 foreign companies closed because they were nearing the end of their 10-year tax holiday. Since then, more plants have closed and manufacturing as a whole has stagnated.
The majority of manufacturing plants in St. Lucia are owned and operated by foreign companies. They open plants on the island to take advantage of the cheap labor, low tax rates, and easy access to the U.S. market. However, because the government of St. Lucia gives tax incentives to these companies, the island community does not receive many benefits from the arrangement apart from employment gains.
In employment terms, however, manufacturing is still much less important than agriculture and tourism, and 1999 export figures show that all manufacturing, including beverages and tobacco, earned only US$21 million. Construction, on the other hand, has grown sharply since the mid-1990s with a mixture of public-sector investment, such as roads, and private-sector hotel projects. Construction of a new large Hyatt hotel in the north of the island created many jobs and gave a boost to local builders and suppliers.