Key facts
- Portugal's government has tightened immigration rules to curb migrant inflows.
- The construction sector, vital for addressing the housing crisis, faces labor shortages.
- Immigrants constitute approximately 30% of the construction workforce.
- The country needs an estimated 300,000 new homes and 80,000 construction workers.
- A government fast-track visa scheme for construction workers has been slow to issue permits.
Portugal's center-right government has implemented stricter immigration rules, aiming to curb "uncontrolled inflows" and appease the far-right, but these measures are significantly impacting the construction sector's labor supply.
Construction firms, already struggling to address one of Europe's most severe housing crises, are now facing exacerbated worker shortages. Immigrants, who have become essential to the sector making up nearly 8% of the economy, are finding their legal status uncertain. Jose Simao, a bricklayer from Angola who arrived in 2022, expressed fear of deportation despite having followed all legal procedures.
The government argues the policy shift is necessary to ensure dignified conditions for existing residents and restrict "irresponsible" immigration policies. However, industry executives and economists like Oscar Afonso from the University of Porto argue that these rapid restrictions are detrimental to the country's needs, as immigrants are vital for the economy.
Following a period of increased immigration after 2017, when the previous government eased entry requirements, the number of foreign residents in Portugal more than doubled to a record 1.6 million by 2025. These workers have been crucial for builders, as many Portuguese workers have sought higher wages in other EU countries. Foreigners now constitute about 30% of the construction workforce.
The growing immigrant population also became a focal point for the anti-immigrant Chega party, influencing the political landscape. In 2024, Portugal, mirroring trends in other European nations, tightened its immigration policies.
A study by the Bank of Portugal indicated that net immigration has been halved in 2025 compared to the previous year, with further declines anticipated. This comes at a critical time for Portugal's housing market, where rental costs have nearly doubled since 2017, and the central bank estimates a deficit of 300,000 homes.
Despite plans to build 150,000 affordable homes by 2030 under an EU-backed program, the construction sector faces a significant labor deficit. AICCOPN, the largest construction association, estimates a need for 80,000 additional workers. The Construction Workers’ Union warns of a potential shortfall of 120,000 workers as major projects, including Lisbon's new airport, ramp up.
While the government introduced a fast-track visa scheme, it requires employers to provide contracts and accommodation upfront. To date, only 5,000 such visas have been granted. Joao Sousa, CEO of developer JPS, highlighted the paradox of builders needing to secure housing for incoming immigrants while simultaneously trying to solve the existing housing shortage.