The workers from Sri Lanka have arrived, but it's still not enough/courtesy of the Negev Contractors Association
The manpower crisis plaguing the construction industry does not leave the headlines.
The plight of the contractors is in focus, and the focus given to it misses the tremendous secondary damage caused to a long line of ancillary branches in the economy, which collectively employ over 100 thousand workers.
The scope of activity of the construction industry is estimated at 25 billion shekels per year, and the manufacturers report a loss of tens of percent, which may lead to the reduction and even complete closure of additional production lines.
Among other things, we are talking about the furniture, glass, cement, etc. industries, which are facing a flow crisis that is getting worse and worse.
How serious is the situation and who is still smiling in these troubled days? We talked to a long list of senior officials in the various industries.
According to the data of the National Builders Contractors Association, almost 40% of the construction sites are completely closed, and those that are operating, work at a 30% output compared to normal days.
The construction industry makes up about 6-7% of the GDP, and this slowdown causes damage that translates into a loss in the amount of billions.
Before the war, about 80,000 Palestinians, about 30,000 foreigners, and a few tens of thousands of Israelis were employed in Israel as part of 'wet jobs' (skeleton, ironwork, etc.).
A few hours after Israel declared a state of war, the entry of Palestinian workers was prohibited.
As of today, out of the 65 thousand missing workers, a limited number of thousands of foreign workers have arrived in Israel from several countries abroad. And as mentioned, the impact on the various industries is extremely severe.
Gabi Ben Harosh, Chairman of the Association of Carriers and Drivers: "A terrible reality"
"The reality is terrible for the truck drivers who work exclusively for the construction industry, their work was cut off suddenly and we are talking about very high losses. There are some who have converted to other fields, but in the end, there is a terrible crisis here," notes Gabi Hen Harosh, chairman According to him, the employers are in a trap, "Also, even before the war, the industry suffers from a manpower shortage, so a company that lays off workers now, may with a high degree of probability have a very difficult time filling its ranks, once the war is over."
Consumers switch to products at more affordable prices.
Sofa by Napo/Tomer Bassel
Let's not forget that many of the truck owners who work for the construction industry, took out loans for the purpose of purchasing the truck, which they continue to pay regularly.
Add to that the very high insurance costs that they pay, including expensive treatments and repairs, and you end up with a very problematic wedding line: thousands of truck drivers who are not getting close to closing this month.
Eli Cohen, Chairman of the Consumer and Construction Industries Association of the Manufacturers Association: "The trouble is that we don't see the light at the end of the tunnel"
The impact of the manpower crisis in the construction industry is significantly greater than it appears: according to the data of the Association of Manufacturers, in the first quarter of 2024 there was a dramatic decrease in the scope of activity of the related industries, at a rate ranging from 45-55%.
"This refers, among other things, to businesses in the following areas: cement, glass, Styrofoam, insulating materials, doors, finishing materials for construction, plasters, sealing materials and plaster. All of these are experiencing a very serious slowdown in business activity, along with a severe damage to the supply and transportation of raw materials from Israel and the world." , notes Eli Cohen, CEO of Thermokir and Chairman of the Consumer and Construction Industries Association of the Manufacturers Association.
According to him, the geopolitical changes are forcing the industrialists to look for alternatives to markets from the East and Russia, and it is clear that factories and employers will not be able to subsidize the decrease in production over time and the operating expenses without continuing to receive aid from the government for businesses: "The trouble is that we do not see the light at the end of the tunnel. Some contractors have managed to "A number of employees are working to complete the contractual obligations within the framework of old projects, but there are almost no new projects. Let them understand, we are talking about countless businesses, blue and white, that manufacture in Israel, that have fallen into an ever-increasing predicament here."
Bentzion Adorem, Chairman of the Furniture Industries Association of the Manufacturers' Association and Yossi Alkovi, President of the Craft and Industry Association
Unlike other industries, whose entire activity has slowed down drastically due to the stagnation in the construction industry, as far as the furniture sector is concerned - the trend is mixed: Yossi Alkobi, points out that carpentry in Israel is currently facing a sharp slowdown, and a decrease of 60-65% in the scope of activity, among other things, due to The manpower crisis and due to the psychological-economic climate, which changes the priorities of the public.
"As far as the companies that produce kitchens, wall cabinets and other furniture that is defined as attached to a building intended for new apartments - the situation is bad, a serious stagnation, we feel it very well" adds Adorem.
At the same time, when it comes to home furnishings, such as sofas, tables and complementary elements - the picture is more encouraging: "The shopping malls are crowded and we see a consistent improvement in the volume of sales", notes Adorm.
Giving up on luxury brands.
Ofer Barak, CEO of the stock network
"There is a certain trend of recovery, especially these days, before Passover, which are characterized as days of home renewal," says Moshiko Fleischer, owner of Karma - the center for home design, "The recovery is also due to sales promotions and deep discounts that reach rates of tens of percent, carried out for a number of products that increase the viability of the purchase."
Ofer Barak, CEO of the 'Hastok' chain: "Despite the war, the work is relatively good, I attribute this to the fact that there are not many flights, so the public is left with a budget that is allocated to purchases in Israel."
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