Israel's renovation industry is facing a prolonged labor shortage that has driven some contractors out of business and forced others to take jobs as waiters and delivery couriers, industry leaders warned Thursday at an annual conference marking the 25th anniversary of the Israel Renovation Contractors Association.
Speaking at the conference, held at the Dead Sea, association chairman Eran Siv criticized the government's handling of the workforce crisis, warning that delays in bringing foreign workers to Israel were threatening the survival of renovation businesses.
"I personally know many renovation contractors who simply left the industry, gave up, and some became waiters and Wolt delivery couriers," Siv said, referring to the popular food delivery platform.
The conference brought together industry representatives who raised concerns about the persistent shortage of workers, the entry of foreign construction companies into the Israeli market and the potential impact of mounting government budget pressures on small and midsize businesses.
'We have an enormous labor shortage'
According to Siv, only about 1,000 foreign workers have arrived in Israel to work in the renovation sector over the past three years, compared with approximately 15,000 Palestinian workers employed in the industry before the Hamas-led attack on southern Israel on Oct. 7, 2023.
The attack and the subsequent war led Israel to sharply restrict the entry of Palestinian laborers, leaving construction and renovation businesses struggling to replace a workforce on which they had long depended.
"We have an enormous labor shortage. I suggest that officials from the Housing Ministry come to a renovation site for one day and see the hardship we're facing," Siv said.
"The state approved 5,000 foreign workers. When will they arrive? In another 10 years? Another 20 years? Why isn't this problem being solved?"
Israel Renovation Contractors Association Chairman Eran Siv speaks with ynet's Hila Tsion
(Photo: Alom Talmi)
Siv said the prolonged shortage had already taken a significant toll on contractors, some of whom had been forced to shut down their businesses or move into other professions.
He accused government ministries of being disconnected from the conditions facing contractors on the ground and called on authorities to accelerate the arrival of foreign workers already approved for the industry.
Foreign construction firms raise concerns
Beyond the workforce shortage, industry representatives voiced strong opposition to allowing foreign construction and contracting companies to expand their operations in Israel.
Mazal Golan, chairwoman of the Construction and Allied Industries Workers Union, warned that foreign companies could undermine local businesses, particularly smaller contractors with limited resources.
"The entry of foreign construction companies into Israel's fields of work poses a real danger to the industry," Golan said.
"Such a company can operate here almost as a closed system, bringing its own equipment, workers and operational infrastructure. The ones pushed out are Israeli businesses, first and foremost small and midsize contractors."
Golan argued that the expansion of foreign companies would threaten not only local businesses but also the livelihoods of workers and families who depend on them.
"This is a direct threat to livelihoods and businesses built through years of hard work, businesses supported by families, employees, knowledge and experience accumulated over time," she said.
"The state needs to strengthen local businesses, create opportunities for them and provide them with the tools to grow. We are working, and will continue fighting, to prevent the entry of foreign companies."
Her remarks reflected concerns among domestic contractors that foreign firms, particularly those able to import their own workers and equipment, could gain a competitive advantage over Israeli businesses already struggling with labor shortages and rising operating costs.
Industry warns against tax hikes after elections
Yossi Alkobi, president of the Manufacturers and Crafts Association of Israel, addressed the economic challenges awaiting the next government, warning that efforts to address the country's budget deficit must not come at the expense of small and midsize businesses.
"We are on the verge of elections. All the candidates are promising us the moon, but our job is to make sure those promises are actually fulfilled, and we will do that through the committees of the next Knesset," Alkobi said, referring to Israel's parliament.
He said Israel faces significant fiscal challenges stemming from the war, elevated defense spending and damage to economic growth.
Alkobi urged policymakers to ensure that measures aimed at reducing the budget deficit do not impose additional financial burdens on business owners.
"Our responsibility is to make sure the next government acts professionally and responsibly, and that the budget deficit is not addressed at our expense or at the expense of small and midsize businesses," he said.
"We will not allow tax increases and budget tightening to be carried out on our backs."
The warnings highlighted the overlapping pressures confronting Israel's renovation industry as the country approaches elections: a workforce that has yet to recover from the disruptions following Oct. 7, growing concerns about competition from foreign contractors and fears that efforts to stabilize public finances could further strain businesses already struggling to remain operational.