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Luxembourg steps in to prevent mass redundancies in crisis-hit construction Industry

Construction of a railway in Luxembourg City (Leonid Andronov/Dreamstime)
Luxembourg’s government has offered assistance to elements of its construction industry in the six months between February and July 2024. The two sub-sectors of the industry that are deemed to be “in crisis” are residential and non-residential buildings, and demolition and site preparation.

The slowdown in the sector is thought to be driven by a number of factors, including Covid-19, the war in Ukraine and rising inflation and interest rates, resulting in housing sales falling 47% in the third quarter of 2023.

According to Statec, Luxembourg’s national statistics institute, the building land markets declined by 56% in the third quarter of 2023.

To mitigate the decline, Luxembourg will introduce a “short-time working” scheme, allowing for businesses to apply for state reimbursement for a portion of an employee’s wage.

Georges Mischo, Luxembourg’s labour minister, said: “It is vital to preserve jobs in the sector. We must do everything we can to support employees affected by the current situation. The sector is vital to the Luxembourg labour market, and companies in the sector will need these employees as soon as the economy starts to recover.”

Lex Delles, Luxembourg’s minister of the economy, SME, energy and tourism, said: “The government has decided to use short-time working to help the construction sector get through this difficult period. This measure will also ensure that the construction sector has the necessary workforce to be able to carry out major housing projects when the economy recovers.”

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