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Portugal’s stricter immigration rules are creating fresh challenges for the country’s construction sector at a time when it is trying to address a severe housing shortage. Industry leaders say the new measures have reduced the availability of migrant workers, who make up a significant share of the construction workforce. With the country planning large-scale affordable housing and infrastructure projects, developers and trade bodies have warned that labour shortages could delay construction, increase project costs and affect the delivery of new homes over the coming years.
Portugal’s tighter immigration policies are creating fresh challenges for construction companies that are already struggling with labour shortages while working to address one of Europe’s most severe housing shortages.
Workers such as Jose Simao, who moved from Angola to Portugal in 2022 to work as a bricklayer, now face uncertainty over their future despite being legally employed. He said he had complied with all government requirements after arriving in Portugal, but recent changes in immigration rules have left him worried about whether he will be allowed to remain in the country.
The centre-right coalition government has said the stricter rules are intended to control immigration while ensuring proper conditions for migrants already living in Portugal. However, construction companies, industry associations and economists argue that the measures have worsened labour shortages in a sector that contributes nearly 8% to the country’s economy.
Oscar Afonso, Professor of Economics at the University of Porto, said the government had tightened immigration policies too quickly despite the country's workforce needs, adding that migrant workers remain essential to Portugal’s economy.
Portugal experienced a sharp rise in immigration after 2017, with the number of foreign residents more than doubling to a record 1.6 million between 2021 and 2025. Foreign workers now account for nearly 30% of the country’s construction workforce after many Portuguese workers moved to other European Union countries for better-paying jobs.
A study by the Bank of Portugal found that tighter immigration measures had already halved net immigration to around 6,200 people per month in 2025 compared with the previous year, with experts expecting further declines.
The timing is significant as Portugal faces a shortage of around 300,000 homes, while rents for new leases have almost doubled since 2017. The government plans to build 150,000 affordable homes by 2030 through a EUR 9 billion (USD 10.3 billion) European Union-backed programme.
Despite a 34% increase in construction employment between 2020 and 2025, Portugal’s largest construction association, AICCOPN, estimates the industry still requires around 80,000 additional workers. The Construction Workers' Union has warned the shortage could eventually reach 120,000 workers as large infrastructure projects, including Lisbon’s new airport, move forward.
The government introduced a fast-track visa scheme in the past year to help construction companies recruit overseas workers, but employers must provide both employment contracts and accommodation before workers arrive. Only around 5,000 construction visas have been approved so far.
Joao Sousa, Chief Executive Officer of JPS, said the industry urgently needs workers but companies are also expected to arrange accommodation despite the country's housing shortage. Around 90% of JPS’s workforce consists of foreign workers, highlighting the sector’s dependence on migrant labour.
The revised rules are also affecting workers already living in Portugal. Simao’s residence permit expires in August, but under the new regulations he must provide a formal rental agreement to renew it. As he rents under an informal arrangement without official receipts, his legal status remains uncertain.
While countries such as Spain and Italy are expanding work visas or regularising undocumented migrants to address labour shortages, Portuguese construction companies believe similar measures may be necessary to avoid delays to housing and infrastructure projects.
Source Reuters
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