Construction sector needs 73,000 more workers, partly due to Defense expansion plans

The construction sector will need approximately 73,000 new workers over the next three years, according to the Economic Institute for Construction (EIB). The Ministry of Defense's plan to expand its personnel to 100,000 by 2030 is reportedly set to add further pressure on the already tight labor market.

The construction sector has faced chronic labor shortages for years, even as the Netherlands pursues major ambitions: building large numbers of homes, expanding the currently overwhelmed power grid, renovating infrastructure, and advancing sustainability goals. The expansion of the armed forces and defense industry is adding further competition for personnel. In a new report, the EIB warns that it is therefore "not self-evident" that all of those societal ambitions can be realized simultaneously.

Several of these priorities partly draw on the same scarce pool of technical workers, including mechanics and electrical technicians. Because of this “significant overlap,” civil engineering and infrastructure contractors in particular feel the effects of the defense’s rising personnel needs, the EIB states. The same applies to sustainability projects. In the occupation with the highest worker shortage, even a shortfall of just a few additional workers can result in project delays.

The Ministry of Defense aims to expand its personnel to 100,000 by 2030. According to the EIB, this will create an additional demand of roughly 5,100 full-time jobs across the border defense sector through 2035.

The institute points out, however, that pressure on the construction sector could ease due to other developments. Employment is expected to shrink in several sectors that compete with construction for workers, including manufacturing, trade and rental, and other business services. The EIB also notes that it remains unclear whether recruitment efforts in the defense sector will prove sufficiently successful.

Of the roughly 73,000 workers the construction will need between 2027 and 2030, the largest share - about 52,000 - is expected to come from new entrants graduating from relevant education and training programs. The remaining more than 21,000 workers will have to be found elsewhere.

Foreign workers could also reportedly help fill part of the gap. However, the EIB fears that the arrival of foreign temporary agency workers may be constrained by stricter housing requirements and a shortage of suitable accommodation. “In addition, the more critical societal and political sentiment surrounding labor migration may limit public support for further inflows,” the institute states.