12:40 8 March 2025
Concrete, Steel… and No One to Build
Hammering, drilling, sawing—the emergence of a structure over the course of months or even years—requires human intervention. The shiny new shopping mall, or soaring apartment building, are nothing more than hopeful oaths without someone to labor building them. Even in the age of AI and advanced robotics, real estate projects do not build themselves. What’s more, the housing market, including labor and material costs, act as a barometer of economic health and require strategic interventions to navigate cyclical fluctuations and maintain stability.
With revenues from 300 of Poland’s largest construction groups—totaling approximately PLN 150 billion in 2024 and accounting for 60 percent of the overall revenues in the medium and large construction sector (according to Spectis’ Construction Companies in Poland 2025-2030 report)—it’s no wonder that labor shortages have become a major concern, as well as an indicator of underlying problems.
The cyclical nature of construction work is already difficult to navigate, but with rising labor and materials costs there is a very real danger of bankruptcy. The construction industry accounted for 13.1% of all company bankruptcies in Poland during the first half of 2024, according to Statista. Over 700 companies declared bankruptcy in 2024, a 40% increase from 2023. Small firms, especially in installation, renovation, and general construction, struggle the most. Key factors include delays in disbursing funds from the National Reconstruction Plan (KPO), stagnation in railway investments, and slow progress in energy transformation discussions.
Tradition!
So, where does the traditional construction worker in Poland come from? Construction workers in Poland have usually been men, often from rural areas. They either learned the trade from other men or attended vocational schools. In the past, these workers had far fewer career opportunities compared to today's workforce. Now, many construction workers are older and approaching retirement. Age has caught up with the labor force.
Fewer and fewer young people are pursuing skilled trades, as the number of students enrolling in technical schools and trade programs continues to decline. Wage dissatisfaction has driven many to emigrate to Germany, the Netherlands, and Scandinavia. However, emigration out of Poland is not a new trend.
According to a report by the Polish Agency for Enterprise Development, young Poles are increasingly choosing technical and skilled trades (e.g., automation specialists) and white-collar professions (e.g., software developers, financial analysts), while fewer are entering the construction sector. This shift appears successful, as Poland currently has one of the lowest unemployment rates in the EU, at 5.4%, according to the Ministry of Family, Labor, and Social Policy. That is, the trends are good for the white collar jobs, not so great for the blue.
It’s the demographics
French philosopher and mathematician Auguste Comte once said, “Demographics is destiny.” When one looks at the demographics of Poland, there is a definite downward trend. Around 20% of the population of 38.5 million is 65 or older. The median age is 41.8 years old. Every year the Polish population gets smaller and smaller. So, if there are fewer Poles to fill these labor gaps, then what are the choices?
Immigrants to the rescue?
The only viable solution to a labor shortage, at the moment, is to attract foreign workers. Skilled migrants are a boon to the labor pool, and turning them away could have negative effects. Ask any Florida developer how quickly construction halted once anti-immigration laws went into effect and the requisite labor disappeared. U.S. labor shortages were already high with immigrants, with a national gap of 500,000 workers in 2024, according to Walter Duke and Partners. Blocking migrant labor exacerbated an already difficult situation in the US. So where does Poland draw labor from?
With the war in Ukraine there has been a marked increase in the number of migrants from Ukraine and Belarus, accounting for 1.13 million in the workforce. They have been filling in, but only as a stopgap. When the war ends, assuming it will, this labor force may move on. Some already have. The Ukrainians will definitely head home in order to rebuild what Russia has destroyed. In the last two years the number of Ukrainians has fallen by six percentage points. However, the number of citizens from other countries has grown.
Indians, Nepalese, Filipinos, Vietnamese, and now, according to GUS, Colombians are migrating to fill labor gaps. The number of Colombian migrants has grown by over 350 percent in 2023/2024, according to a Smart Solutions report. Filipinos, in the first half of 2024, accounted for over 20,500 work permits.
Entering the EEC debate
At this year’s EEC Trends, a prologue to the European Economic Congress, during a panel on “Construction and infrastructure,” panelists discussed issues with construction labor. Participants outlined some of the issues, including how Polish workers were discouraged by industry wages, by working conditions, and (curiously) the high level of responsibility. Raising wages, improving work conditions, hiring skilled migrant labor and encouraging women to join the workforce were seen as solutions to the crisis.
Cezary Łysenko, a member of the board of Budimex, said,”We should consider whether investment plans should be more meticulously outlined for 5-10 years ahead, so that every entity, not just the large ones, can plan its investment perspective—not only in equipment but also in human resources.” According to Łysenko, interest in technical universities, especially in construction-related fields, has been declining by 5% annually.
Where go costs?
In 2024, construction material costs in Poland stabilized after sharp increases in 2021-2023, though they remain above pre-pandemic levels due to inflation, labor costs, and energy prices, according to USP Research. Key materials like cement, steel, and bricks continue to be expensive, while timber, glass, and insulation materials remain cheaper than in Western Europe, making Poland a key exporter, according to Fenbro. Some material prices have slightly decreased due to lower energy costs and reduced demand. Poland's competitive manufacturing sector keeps it an attractive market for sourcing building materials despite ongoing cost pressures.
It’s time to automate
The rapid pace of industrial robotization globally, including in Poland, is reshaping the world economy. Poland lags behind in automation, ranking 28th according to a report from the International Federation of Robotics (IFR). There are 78 robots per 10,000 workers in Poland, far below the global average. However, this statistic reflects industrial production. In construction, there is a general need for robotization if human labor cannot meet the demand. Bricklaying robots, 3D-printing robots, autonomous demolition robots, drones (for surveying), and exoskeletons (to assist workers with heavy lifting) are some of the ways robotics could help fulfill roles, according to Global IMI. However, with high initial costs and prohibitive regulations, the road to human-robot synergy is fraught with more than a few obstacles.
Immigration may provide a temporary fix but, in the long term, Poland continues to face serious labor shortages. Immigration, robotization, better working conditions, and higher wages (according to Statista, wage growth in Poland was up 9.5% in 2024) may help reverse some of the emigration Poland is currently experiencing, but we should still expect construction costs to continue their upward trend.
