Prompted by the ongoing challenges faced by Luxembourg's construction industry, the government is set to implement decisive measures, officially declaring the sector in a state of crisis in the coming days.

Patrick Dury, head of the Luxembourg Confederation of Christian Trade Unions (LCGB), confirmed that the construction industry has reached a critical point, leading the government to take action by declaring the sector officially as "in crisis."

Minister of Labour Georges Mischo and Minister of the Economy Lex Delles confirmed this decision in interviews with our colleagues from RTL.lu following the Government Council meeting on Wednesday.

Effective 1 February, the construction sector will be designated in a state of crisis for a duration of six months, extending until the collective leave period this summer.

To address the challenges, companies within the sector will be eligible for a streamlined short-time working procedure, reserved for site workers.

The government has outlined specific criteria for the application of this measure, limiting it to 20% of company staff and exclusively within the earthmoving, demolition, residential, and non-residential construction sectors. While civil engineering remains unaffected at present, the government does not rule out including this sub-sector in the future.

The employers' request for a job maintenance plan for the entire sector has not been accepted. Instead, short-time working will be financed by the state, with Mischo emphasising that inspections will be conducted by the Inspectorate of Labour and Mines (ITM) and the National Employment Agency (ADEM) to ensure compliance.

Beyond the immediate crisis measures, the government aims to activate additional strategies, including tax benefits for investment and accelerated depreciation.

Prime Minister Luc Frieden announced these measures at the New Year reception of the Federation of Luxembourg Industrialists (FEDIL). These measures have been drawn up by the Ministries of Housing and Finance.

According to Mischo, the government intends to wait before assessing whether these measures may distort the market or prevent prices from falling as expected.

The government's primary objective remains the protection of workers from unemployment and the revitalisation of the construction sector.