The labour and regulatory challenges putting pressure on construction feasibility
Demand for housing and infrastructure is not the problem for the construction sector. Feasibility is. Two of the most significant issues are labour problems and the increasingly complex regulatory environment. Construction firms of all shapes and sizes are encountering problems in these areas which make their projects less feasible.
A dual labour challenge causing major problems
There are two aspects to the labour challenge facing construction companies across the EU and UK. The first is the general shortage of available construction workers. Robbert Ausems, head of the 4PS construction business unit in the Netherlands describes it as, “one of the main issues that construction is facing.”
The available data confirms this assessment. Research from Oxford Economics covering the EU and UK shows:
28% of construction firms are reporting that a lack of personnel is limiting their output
14% are intending to hoard labour in 2026 to try and minimise their future risk1
If there aren’t enough people to work on the jobs, the pace of construction will slow down and feasibility will suffer. There is also a demographic and quality challenge facing the sector.
Robbert says: “The bigger challenge is finding qualified labour. Older people who have high-level skills are retiring. You don't see the young people developing those skills anymore in the same way because we taught them that it was better to have a university education instead of a technical education where you can be a carpenter or an electrician.”
This pair of linked problems creates a feasibility issue for residential and infrastructure construction, no matter how much demand there is.
Regulatory complexity is making it harder to build
In addition, regulatory challenges are making it harder to build, creating further feasibility pressure for EU and UK construction firms to navigate. The construction sector:
Causes 35% of the EU’s greenhouse gas emissions
Generates 35% of its waste
Uses approximately half of all its extracted materials2
Nobody is arguing that there doesn’t need to be regulation to reduce this environmental impact. However, the way current legislation works makes residential and infrastructure development less feasible. Robbert explains the impact this has on construction companies: “Regulation pressure is extremely difficult and the process of meeting the requirements takes a long time. Residential builders in the EU are suffering because of CO2 requirements. They have capacity, but it's hard to get everything in place to meet these regulations.” According to the Construction Outlook 2026 Report from Think, those regulations and others mean the number of construction permits issued for residential developments in the EU is lower than it was in 2021. Once a permit is issued, it can take up to two years to complete a housing development.
That timeline is a real feasibility issue for construction businesses. Margins are getting tighter and any delays can cause real financial danger.
How can companies overcome labour and regulatory challenges in construction?
Our e-book Housing and Infrastructure Under Pressure explores how construction businesses can get ahead of feasibility pressure by understanding:
Where feasibility pressure is really coming from
How leading construction companies are responding
Which strategies help improve predictability and performance
Download the e-book to explore the insights and practical approaches shaping the future of construction.