The EU needs a competitive and resilient construction industry

At a conference held at the European Economic and Social Committee (EESC), participants discussed the challenges facing the construction sector in the European Union and pointed out that future measures must be aimed at enhancing workforce skills, reducing construction costs, improving workers’ protection and ensuring fair competition.

The EU must fix a number of problems that are impacting its construction sector, including labour shortages and the unprecedented housing crisis. It must also make changes to its public procurement directives and fight abusive subcontracting.

These were the areas of discussion at the conference on Building Tomorrow: Addressing Europe’s construction sector challenges - social partners’ & civil society’s inputs, which took place in Brussels on 24 June 2025.

The event was organised by the EESC’s Section for Transport, Energy, Infrastructure and the Information Society (TEN), in cooperation with the European Construction Industry Federation (FIEC) and the European Federation of Building Workers and Woodworkers (EFBWW), with opening remarks by the EESC President Oliver Röpke and moderation by EESC Vice-President Aurel Laurenţiu Plosceanu.

Labour shortages

The European construction sector is experiencing significant labour shortages due to an ageing workforce, reduced interest among younger generations and the increasing complexity of projects. The upshot of these shortages is project delays, higher costs and potential declines in work quality.

To address this issue, it is essential to improve working conditions, offer competitive wages and invest in training programmes. Promoting construction as a rewarding career and leveraging technology to enhance productivity can also help mitigate the impact and preserve the standing of the industry.

Affordable housing

The construction sector also faces several significant challenges in making housing affordable. Rising costs of materials, labour shortages and stringent regulatory requirements have increased the overall cost of building new homes. In urban areas, land is scarce and expensive, and zoning laws often restrict high-density developments, further limiting the availability of affordable housing. Complex building codes, environmental regulations, and lengthy permit processes add to the costs and delays in housing projects.

The demand for affordable housing often exceeds supply, driven by population growth and urbanisation. New affordable housing developments frequently face opposition from local communities, complicating efforts to increase housing stock. Addressing these issues requires innovative construction methods, government incentives and streamlined regulations to make housing more accessible and affordable for all.

The housing crisis Europe is going through is serious: over 10.6% of urban dwellers and 6.2% of rural residents are burdened by high housing costs. To overcome this problem, the EU needs to see substantial investment in social and affordable housing, but securing funding is challenging. For many years, the Committee has consistently called for investment in affordable, accessible, sustainable and decent housing.

Reviewing the public procurement directives and tackling abusive subcontracting

Last but not least, urgent improvements to legislation and better coordination are needed in order to ensure fair competition in the construction sector.

While subcontracting is not necessarily a problem, it is often used to reduce costs and to speed up the execution of projects, especially in a cross-border context.

The current review of the public procurement directives must be guided by the following goals: strengthening the fight against illegal practices, in particular in subcontracting, bringing about increased use of the ‘most economically advantageous tender (MEAT)’ approach in the awarding of public contracts, and properly enforcing the existing provisions, in order to protect workers and ensure fair competition. Instead of just being focused on the lowest price, MEAT indicates best value for money after considering criteria such as quality, and environmental and social factors.

Quotations from speakers

‘Housing affordability has become a widespread and urgent issue across Europe. To tackle the rising demand, especially in our bustling urban areas, it is crucial that we ramp up the construction of new housing units, especially of social housing. But that is not all – we must also focus on lowering construction costs through innovative building techniques and materials. Our ultimate goal is clear: to provide effective solutions to the current housing crisis in Europe and make housing affordable for all Europeans.’

Oliver Röpke, President of the European Economic and Social Committee (EESC)

‘Without a competitive and resilient construction sector in Europe, all the other developments in the energy, dual and water infrastructures, defence, medical infrastructure etc. will be under a huge question mark!’

Aurel Laurenţiu Plosceanu, Vice-President of the European Economic and Social Committee (EESC)

‘We have explored the multifaceted challenges of making housing affordable, recognising the need for innovative solutions and collaborative efforts to address rising costs and regulatory barriers. By addressing these challenges head-on, we can build a more resilient, equitable and sustainable construction sector for the future. The EESC remains steadfast in its commitment to advancing the cause of ensuring all Europeans have access to affordable, sustainable and accessible housing.’

Baiba Miltoviča, President of the Section for Transport, Energy, Infrastructure and the Information Society (TEN), EESC

‘The construction industry is complex. It is more than just building houses and infrastructure, it is about working for the well-being of EU citizens, fostering the competitiveness of the EU economy and providing a key contribution to the achievement of the sustainability goals. What is important is to always keep dialogue open among policy-makers and stakeholders, and the EESC is the best platform to provide such an opportunity.’

Domenico Campogrande, Director General of the European Construction Industry Federation (FIEC)

‘The European Union must impose a ban on the ‘lowest price criteria’ in public procurement. The lowest price always comes with a social cost, quality issues and safety problems for workers!’

Gianni De Vlaminck, European Federation of Building Workers and Woodworkers’ Building Committee (EFBWW)