Europe labour shortage hands win to Asian builders, says cement maker Holcim

LABOUR shortages are complicating a recovery in Europe’s construction market, with Asian contractors increasingly stepping in to fill the personnel gap, according to Swiss cement maker Holcim.

The industry faces worker bottlenecks everywhere, but particularly in Europe and Australia, chief executive officer Miljan Gutovic said in an interview. Cie. de Saint-Gobain CEO Benoit Bazin echoed those comments, saying the staffing squeeze that’s limiting data centre build-out in North America is coming to Europe.

While the region needs some 10 million new homes, the construction sector is increasingly struggling to find workers willing to endure physically demanding outdoor conditions, even as some countries grapple with rising unemployment. In some places, “the labour will come from South-East Asia because it is impossible to find” enough local personnel, Gutovic said.

The challenges leave an opening for contractors from China. Firms from the Asian country are winning major industrial contracts by combining equipment supply and on-site installation into a single integrated offer, Gutovic said. These firms can mobilise quickly and at scale, he added.

“In some markets, European companies are not competitive anymore,” the CEO said.

Holcim hired a Chinese contractor to help overhaul its cement plant in Obourg, Belgium. The site is undergoing a transformation to modernise it and become one of Europe’s first near-zero emissions cement facilities.

The worker bottlenecks, along with higher borrowing costs, may determine the pace of a recovery in the European construction sector.

In a separate interview with Bloomberg Television, Gutovic cited surging building permits in Germany and said he sees the residential market in the region recovering as soon as the second half of this year. Saint-Gobain’s Bazin also flagged improvements in France.

The labour squeeze is also changing how buildings are put together. Holcim’s recent acquisition, Xella, is central to that shift. The business produces energy-efficient walling systems and aims to operate on an off-site, modular concept that Gutovic says can cut on-site labour needs in half. Holcim already does some off-site production.

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Meanwhile, Holcim has rolled out an AI platform across its industrial network, feeding data from millions of sensors into algorithms that predict failures and optimise operations. The company is also using AI to cut down logistics costs, Holcim’s single biggest expense at a quarter of the total. BLOOMBERG