Israel’s Construction Industry Calls for 20,000 More Foreign Workers to Accelerate Housing Delivery

Israel’s construction industry is stepping up its call for an immediate expansion of foreign labor, with Eldad Nitzan, chairman of the Foreign Manpower Corporations in the Construction Industry, backing a request by the Housing Ministry to bring in an additional 20,000 workers through the private recruitment channel.

Nitzan expressed support for Housing Ministry Director-General Yehuda Morgenstern’s appeal to Drorit Steinmetz, Acting Director-General of the Prime Minister’s Office, arguing that expanding private recruitment is essential to restoring the sector’s operational capacity and accelerating the delivery of new homes.

The proposal comes amid a persistent shortage of skilled construction workers, despite a significant increase in the number of foreign employees brought to Israel since the outbreak of the war in October 2023. Approximately 90,000 foreign workers are currently employed in Israel’s construction industry, compared with around 25,000 before the war. The Housing Ministry estimates that an additional 20,000 to 25,000 workers are still needed to meet the sector’s requirements.

Growing Gap Between Housing Starts and Completions

According to figures cited by the Housing Ministry, housing starts have increased by approximately 41% over the past decade, reaching around 80,000 units annually during 2025–2026. However, the number of completed homes has remained at approximately 60,000 during the same period.

Construction timelines have also lengthened considerably, rising from approximately 28 months in 2016 to 37–38 months in 2025–2026.

The ministry attributes much of the gap between housing starts and completions to insufficient manpower, which has slowed construction activity and delayed the delivery of apartments to buyers.

Labor Shortage Adds to Construction Costs

The shortage is also placing pressure on construction companies’ operating expenses. With fewer available workers than the industry requires, employers face higher hourly labor costs and increased recruitment and employment expenses.

The Housing Ministry has warned that these increases are reflected in the labor component of construction input costs and may contribute to higher apartment prices.

The ministry’s position is that increasing the available workforce is necessary not only to shorten construction schedules but also to ensure that the growth in housing starts translates into a larger supply of completed homes.

Nitzan: Private Recruitment Is Essential to Industry Stability

Nitzan welcomed Morgenstern’s initiative, describing the private recruitment channel as an effective mechanism for bringing additional workers into Israel.

“I welcome the Housing Ministry director-general’s recognition that there is an immediate need to bring approximately 20,000 additional workers to Israel through the private recruitment channel, which has proven effective in maintaining the stability of the industry,” Nitzan said.

“Strengthening the private recruitment framework is an essential step for the construction sector. I call on the Finance Ministry to approve the enforcement budget required to advance the Justice Minister’s decision into a government resolution.”

Government Under Pressure to Address Workforce Constraints

The proposal highlights the growing urgency of the labor issue for Israel’s construction sector. While the number of foreign workers has risen substantially since the start of the war, industry representatives and the Housing Ministry argue that existing recruitment arrangements have not yet provided enough workers to meet demand.

The proposed addition of 20,000 workers through private recruitment is intended to help close that gap, improve construction productivity and increase the pace at which new apartments reach the market.

The debate now turns to the government's willingness to expand the private recruitment framework and provide the regulatory and enforcement resources needed to support it.