March 3, 2017 / 3:45 PM / 2 years ago

Hungary construction sector eyes Belarus, Ukraine to tackle labour shortage

BUDAPEST, March 3 (Reuters) - Hungarian construction companies are planning to lure guest workers from Ukraine and Belarus to plug holes in the labour market created by migration and rising economic growth, the head of the builders’ alliance told Reuters.

Years of emigration to western Europe have created labour shortages in countries such as Hungary, Poland and the Czech Republic, making it tough for businesses to hire.

Poland employed about 800,000 Ukrainian guest workers last year, while there are over 100,000 Ukrainians working in the Czech Republic.

Prime Minister Viktor Orban has ruled out any major guest worker programme, but his government is now trying to attract Ukrainians in limited numbers with an advertising campaign.

“The Hungarian construction sector will not be able to improve its efficiency at a pace that could keep up with an expected increase in demand in the next two years,” Laszlo Koji, chairman of the Federation of Hungarian Building Contractors (EVOSZ), told Reuters.

The sector, which contracted by 18.8 percent last year due to a shortage of European Union funds, could grow by 10 percent this year and add “significant” further gains in 2018, driven by higher EU funds and a housing boom, Koji said.

He said the sector, which employs about 280,000 people, would need up to 8,000 more workers to plug current holes.

The sector could employ about 2,000 workers from Ukraine and Belarus within the next two or three years, Koji said, as any such scheme would need at least a year to take off.

As a first step, EVOSZ will hold a forum next month for companies from Belarus interested in the prospect. They could then become subcontractors of Hungarian businesses, bringing over their own workers, Koji said.

But in the longer term, more efficiency, not more workers would be the answer, Koji said, as Hungary’s potential to attract workers was limited compared to central European rivals, and the issue was also sensitive politically.

“The government’s cautious labour market considerations have put us at a competitive disadvantage to Poland or the Czech Republic,” he said.

Earlier this week, Orban told a business forum that he would support companies in efforts to bring in guest workers but any such measure should be limited and temporary and Hungary should try to address the problem domestically. (Reporting by Gergely Szakacs; Editing by Alison Williams)

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