New construction work has "slowed to a trickle" and some architects offices are operating on a four-day week as the construction industry starts to feel the pain of economic slowdown.

That is the view of Alex DeCouto, president of the Construction Association of Bermuda (CAOB), who said in the organisation's fall newsletter that he expected to see consolidation, as the industry adjusted to meet post-boom levels of demand.

Mr. DeCouto, commercial manager at Greymane Contracting, wrote that the industry was "in the midst of a slow period", highlighted by the fact that local building material supply sales had dropped for six consecutive months to pre-2005 levels.

"The pain for most Bermudian workers in the industry has probably not been too severe at this point, with expatriates at all levels (one third of the construction industry workforce in 2008) being the first to go," Mr. DeCouto wrote.

"This period has also likely coincided with any number of work permit holders reaching the end of 'term limits'. But I do not believe that we have seen the worst of it yet.

"While the anecdotal evidence I have been receiving suggests that workloads have slowed for some, remaining fairly steady through 2009, what is most concerning is the lack of new construction starts in the form of commercial buildings, residential developments or hotels.

"New work has slowed to a trickle. Some architect's offices remain on four-day work weeks. While Government have continued with projects scheduled to go ahead prior to the start of the recession last year, projects like the Salvation Army Housing Project, a multi-use Government facility on Marsh Folly Road, and other capital projects appear to be on hold. Mega projects like the King Edward VII Memorial Hospital P3 and Waterfront Redevelopment are more than a year away, at best."

Mr. DeCouto said that the "cumbersome" process that preceded the breaking of ground in construction projects, combined with the lack of new projects in the pipeline would pose serious problems to many firms.

"If new projects have not been designed, put through Planning and Building Control, and are ready to start in the fourth quarter, the gap in work will seem like a huge gulf to the many companies that need a steady flow of projects to stay in business," Mr. DeCouto said.

"Without significant new construction starts, companies large and small will be faced with difficult business decisions in the coming months.

"I have had someone suggest to me that the small companies will fair better during these times. I disagree. The larger companies generally have room for staffing cuts, access to significant overdraft facilities and/or cash reserves, and are more than capable of bidding and winning the smaller projects.

"While certainly we may see some of the larger companies struggle, the pain is likely to be felt across the board. Competition for projects is likely to be heavy in the near term. Bid lists will be long and tender values will be low." Mr. DeCouto added that he believed the recession would reshape the industry.

"The boom of the last 10 years has been fuelled by cheap money financing an incredible expansion of our ability to service the international business sector with housing, office space, restaurants, etc. The local construction industry, fertile ground for Bermudian entrepreneurship, expanded accordingly to over 700 registered firms, more than any other local industry. Look for consolidation and reorganisation in the future, as the free market adjusts to suit demand moving forward."