Labor Shortages Are Reshaping European Construction

If you ask the pros where their read of the big questions comes from, no one will say a thought leadership article. They’re usually set against a quick and practical glance at the day-to-day; who’s turning up on-site, what’s delayed and whether today’s plan still makes sense. Sometimes it does. Often it doesn’t, and the work needs to get done regardless. But there are fewer hands to do it and less patience for things going wrong.

Change in construction shows up as manageable friction. You adjust, shuffle things around, lean on whoever’s available and keep the job moving. Over time, though, daily adjustments settle into new ways of working. That’s the backdrop to the latest European Contractor Monitor H2-2025 data. The usual suspects – tech, processes or planning – aren’t what everyone’s reacting to. It’s labor shortages.

Labor Shortage Tops the Trend List

When contractors were asked which trend will change construction the most over the next decade, labor shortage came out on top across Europe at 24%, ahead of sustainable materials (15%), AI (10%) and green buildings (12%). 

That’s the headline. But the country detail is where it sharpens:

• 52% of Italian contractors say labor shortage is the most influential trend shaping the industry
• Spain follows with 30%, also well above the European average
• in contrast, the UK and Germany sit below the European average (at 7% and 10% respectively), though shortages still exist 

The differences mostly reflect how directly labor availability affects delivery in each market. Where shortages are acute, they tend to crowd out everything else.

Shortages Aren’t Going Away

At a European level, only about one quarter of contractors say they experience no labor shortage at all. Flipping the ratio, that means that roughly three out of four are operating with some level of constraint.

Looking back at the last few years doesn’t change the picture much. From 2023 through 2025, labor shortages showed relative stability rather than improvement, while the share of contractors reporting shortages hasn’t really come down.

Spain stands out again. Contractors there consistently report the most pronounced shortages, with a high share opting for a qualifier – moderate to extreme. Italy remains under pressure as well. Germany and the UK sit closer to the European average, but still on the negative side of the balance. At this point, most contractors seem to have stopped expecting the situation to ease. The mood has shifted from hopeful whens to practical hows. Instead of waiting out the storm, they’re working with it – making it part of the baseline.

Shortages Ripple Through the Supply Chain

Labor constraints don’t stop at a contractor’s own payroll. Instead, they ripple outward. When contractors were asked about labor shortages in other companies involved in their projects – like suppliers, subcontractors or partners – the picture got much worse, very fast.

• across Europe, 61% report shortages somewhere in their project ecosystem
• Spain again stands out, with a -90% balance between “no shortage” and “any shortage”
• Italy, France and Belgium also show strong negative balances, confirming that shortages are systemic, not isolated

This matters because it removes margin for error. Even if a contractor manages to stabilize their own staffing, the job can still stall if a key trade partner can’t show up when needed. At that point, delays aren’t caused by poor planning so much as a lack of available capacity across the board.

Technology Expectations Stay Selective

When there’s no one left to work, heads start turning towards technology. But the expectations are selective. Contractors first point to prefab (18%), then automation and robotics follow at 11%, with BIM and AI further back. A more morose 23% of contractors say there is no digital solution to labor shortages at all.

That combination is fairly telling. Contractors aren’t anti-technology, but they aren’t expecting it to solve everything either. It’s probably why prefab makes the most sense; it reduces on-site labor peaks and adds predictability. Beyond that, enthusiasm drops off quickly.

AI Props Up Planning

Despite an overwhelmingly buzzy market, contractors aren’t really deploying AI where construction is physical. They’re using it where labor pressure is cognitive.

Among contractors who already use or expect to use AI within the next three years (44% of the total mix), usage tends to concentrate in three areas:

• Planning & design – 37% (EU average)
• Estimation & cost planning – 21%
• Project management – 21%

On-site construction barely registers at 5%. Italy is the standout again. Among the contractors using or expecting AI, 75% expect to use AI in planning & design, 42% in estimation & cost planning and 38% in project management.

That’s called pressure relief. Planning, estimating and coordinating are exactly where labor shortages get finicky, because mistakes multiply downstream.

Notably, 18% of European contractors say they do not plan to use AI at all, and 11% don’t know. Safe to say adoption is highly selective.

Robotics on the Physical Side

Robotics adoption is even narrower, cautious and more task-specific. Among contractors who already use or expect to use robotics (some 27% of respondents), application clusters around repetitive, heavy or modular tasks:

• bricklaying/masonry – 26%
• assembling modules – 23%
• painting/finishing – 16%

Spain leads expectations for robotics in bricklaying and masonry (62%). The Netherlands and Belgium show higher expectations for modular assembly (37-40%). At the same time, 6% of contractors say they don’t plan to use robotics at all, and 10% don’t know.

Again, no gold rush here. Robotics makes sense when the work is repeatable and controlled. On varied, one-off sites, they’re much harder to justify. Most contractors seem to be treating them as a targeted tool rather than a broad solution.

The Bottom Line

Taken together, the report sees an industry adjusting in practical ways. There’s no big pivot hiding in the numbers, just a steady response to a simple reality – there’s less labor available than there used to be, and everyone is figuring out how to work around that without making things more complicated.