The number of local contractors decreased about 10 per cent out of a previous total of 500 construction firms that were members of the Thai Constructors' Association, says president Polpat Karnasuta, adding that this forced more than 20,000 workers out of jobs last year. He said the construction industry was predicted to grow less than the country's gross domestic product this year, which might result in the loss of another 10 per cent from the current 450 association members.

Polpat said construction firms that were not members of the association also suffered a negative impact from last year's slight economic growth and went out of business, but the association could not estimate how many.

He said the industry had been affected by political turmoil and rising oil prices but particularly by delays in the government mega-projects.

"Our margin is almost negative at present. This will be another miserable year for contractors unless the government's mega-projects start up," said Polpat.

Although the government approved a Bt300-billion construction budget, he said that that was not enough to stimulate growth in the construction industry.

Big contractors must adapt themselves by promoting projects abroad, especially in the Middle East and South Africa.

He believes the worst-case scenario is that the construction crisis will last for another year or two. After that, the construction industry will show huge growth, since Thailand still needs to continue developing its infrastructure.

Another main problem for the industry is the shortage of skilled labour. Polpat said this problem would really affect the industry when the mega-projects finally did begin construction.

He said foreign workforce was needed in the long run, because local workers were scarce and unskilled.

He added that the cost of construction projects should decline gradually, due to an expected drop in oil prices this year.

Chalida  Ekvitthayavechnukul

The Nation