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Analytical Decomposing of Labor Productivity Growth in Construction Industry of Bahrain

Bassim Shebeb

Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE). All economic activities of Bahrain evolve around the oil and financial sectors. Like other GCC countries it has been trying to diversify, expand, and develop in other areas. Construction, especially infrastructure investment, is in forefront of such development and expansion. With the process of development and the importance of the structural transformation, it will be very important to understand the fundamental concepts of productivity analysis and measurement, which could help to identify the most proper industry-oriented policy. It is obvious that an economic expansion would create a need for an additional requirement of production factors. Labor requirements could be satisfied by attracting and encouraging the Bahraini (indigenous population) to enter the industrial sector as a long-run solution. This is a relevant and an important issue because as of early 2010s the participation rate of Bahraini in the privately owned construction firms was about 8% only. So there is a potential of increasing the participation rate of Bahraini workers in this industry. This leads to an urgent need for more industry-oriented planning program that would encourage the Bahraini people to participate in the industrial sector