Israeli Builders Warn of Industry Collapse Amid Foreign Company Expansion Plans

Local contractors and the Histadrut labor federation are protesting the Ministry of Construction's plans to increase the presence of foreign construction companies in Israel. They are demanding a halt to the process and an assessment of its impact on businesses and employment, with the union threatening legal action if the ministry proceeds without such a review. The ministry had recently met with ambassadors and economic attachés to present opportunities in the Israeli construction market and details of an upcoming tender, urging them to promote the initiative in their countries to attract experienced companies with modern technologies.

This initiative is part of a government program to accelerate construction, which has received additional funding. Ministry Director General Yehuda Morgenstern stated that expanding foreign participation aims to boost work volumes, enhance competition, and shorten project timelines. He added that the ministry seeks to integrate local and foreign companies and workers, bringing in new expertise and technologies. Michal Aran, head of the ministry's strategy department, noted that embassies could facilitate connections with suitable companies.

However, Israeli contractors, led by Roni Brick, president of the Association of Contractors and Builders, fear that the influx of foreign firms could bankrupt local businesses and jeopardize the livelihoods of hundreds of thousands of Israelis. Brick argued that the industry's problem is not a lack of building capacity but unfavorable working conditions, and that the ministry is proposing to cede market share and revenue to foreign entities. He warned of widespread consequences, including business closures, job losses, supply chain disruptions, and increased dependence on external players in a strategic sector.

Mazzal Golan, chairwoman of the Construction and Related Industries Workers Union, expressed similar concerns in a letter to Minister of Construction Haim Katz. She believes the plan fundamentally alters the industry's structure, potentially harming small and medium-sized contractors, repair firms, and thousands of specialists. Golan also fears the new policy could weaken the system for employing foreign workers, leading to more instances of workers leaving their assigned employers and illegal employment, as well as reduced labor protections.

The union's primary argument is that decisions were based on pre-war conditions. Golan highlighted that since then, tens of thousands of additional foreign workers have arrived, the number of hiring companies has increased, and the housing market and contractors' financial situations have changed. She demands a reassessment based on 2026 data and a pause in practical steps until the review is complete. The Histadrut has already voiced its opposition and is prepared to take legal measures if the ministry proceeds without adequate justification.