By SOMAN BABY

BAHRAIN’S construction industry is bracing for a crisis, with sources predicting thousands of job losses.

Industry leaders predict a major slump in the second half of the year, owing to the global economic crisis.

They also blame increased costs of materials, labour fees and rocketing salaries for skilled professionals.

Sources said thousands of expatriate labourers could be sent home, with investment drying up in new projects.

The new crisis follows a crippling cement shortage which hit the industry last year.

Bahrain Contractors Society chairman Nedham Kameshki said the society’s 250 members were closely watching the situation.

“The society board will meet on Saturday and review the status of various construction projects in Bahrain,” he added.

The industry will be hard hit in the second half of the year, said A A Nass group managing director and Bahrain Chamber of Commerce and Industry (BCCI) construction committee chairman Samir Nass.

“Some of the ongoing projects will be completed, but people will be hesitant to invest in new projects,” he told the GDN.

“The global economic crisis and drop in oil prices have affected our economy in general and the construction industry in particular.

“We are preparing to face the crisis in the construction sector, which we expect to be hit hard by the second half of this year.”

Though the prices of building materials have come down, many other costs have gone up, said Mr Nass.

“The steel prices dropped heavily, but they have not yet reached the original level.

“Cement prices have not come down to the expected level and we are still under the pressure of a quota system in its import.”

With the introduction of new fees by the Labour Market Regulatory Authority (LMRA), the labour costs have gone up substantially, said Mr Nass.

“The salary of engineers and project managers has gone up by 200 to 300 per cent,” he revealed.

“Diesel prices have increased in Bahrain by 43pc, making fleet operations very expensive. All these make the construction market very competitive.

“Many major construction companies may downsize their activities.”

Mr Nass said he is not in a position to predict how the new scenario would affect the job market.