Construction in Portugal 2025: Trends, Challenges and Opportunities

Introduction to the Construction Sector in Portugal

Brief history and evolution of the sector

The construction sector in Portugal has played a fundamental role in the formation of the territory and in economic growth from the time of post-war reconstruction to the present day. During the last decades, the sector has undergone significant transformations, from the intensive urbanization of the 80s and 90s, to investments in infrastructure and modernization after joining the European Union. With the start of the new millennium, Portuguese construction began to incorporate more sustainable practices and innovative technologies, in line with European requirements and the need to adapt to climate change.

Economic importance of construction for the country

Currently, construction represents about 6% of Portuguese GDP, employing more than 300,000 people directly and indirectly. In addition, it is one of the strategic pillars for public investment, especially in times of economic recovery. The sector also has a decisive influence on the real estate market, engineering services exports, and regional development, especially in less populated areas of the country.

Post-Pandemic Growth and Recovery

Impacts of the pandemic on the sector

The COVID-19 pandemic caused a temporary shutdown of works and delays in the supply chain, negatively impacting the construction sector in 2020 and 2021. However, unlike other sectors, construction demonstrated resilience, with a rapid recovery starting in 2022, supported by public investments, the continuity of large projects, and the resumption of investor confidence.

Economic stimulus measures and public investment

The Portuguese government, with the support of the European Union, implemented stimulus measures through the Recovery and Resilience Plan (PRR), allocating billions of euros for urban requalification, sustainable construction, affordable housing and green infrastructure. These investments are creating new opportunities for companies and workers, encouraging innovation, modernization and digitalization of the sector.

Current Trends in 2025

Sustainability and green construction

In 2025, sustainable construction ceased to be a trend and became a requirement. Environmentally certified projects such as LEED and BREEAM are on the rise, and there is a growing focus on reducing the carbon footprint, using recyclable materials and increasing the energy efficiency of buildings.

Digitalization and BIM (Building Information Modeling) technologies

The use of BIM has become standard in major projects, allowing the digital management of the entire life cycle of projects - from planning to maintenance. This technology facilitates collaboration between architects, engineers, and contractors, reducing errors, optimizing deadlines, and reducing costs.

Modular and industrialized construction

The industrialization of construction with the use of prefabricated modules is transforming the way in which buildings are designed in Portugal. This method significantly reduces construction time, generates less waste and allows greater quality control, making it ideal for social housing, hotels and schools.

Foreign Investment and Real Estate Market

Attracting foreign capital

Portugal has become an attractive destination for foreign investors, especially in cities such as Lisbon, Porto and the Algarve. Policies such as the tax regime for non-regular residents and the Golden Visa encouraged the acquisition of real estate and the construction of new projects aimed at the international market. This flow of capital has boosted urban development and job creation.

Impact on property prices and construction costs

The increase in foreign investment generated real estate appreciation in the main urban regions, which led to higher construction costs and greater pressure on affordable housing. This reality has posed challenges for Portuguese families and has boosted the debate on public policies to balance the market and promote housing inclusion.

Shortage of Skilled Labor

Construction worker profile

The sector currently faces a deficit of qualified professionals, as a result of the aging of the workforce, the low attractiveness of the profession for young people, and the departure of workers to other European countries. This has caused construction delays and increased operating costs.

Training and qualification initiatives

To respond to this challenge, technical training initiatives are under way in partnership with vocational training centers and companies in the sector. Programs focused on new competencies such as energy efficiency, the operation of digital technologies and safety at work are today essential to revitalize the sector with a skilled workforce adapted to contemporary challenges.

Sustainability and Energy Efficiency

European standards and environmental legislation

Portugal is aligned with the European Union's climate goals, implementing more demanding regulations in terms of sustainable construction. Energy efficiency and CO₂ emissions standards are applied to all new buildings and profound renovations, promoting the use of clean technologies and environmentally friendly materials.

Buildings with almost zero energy consumption (NZEB)

NZEB (Nearly Zero-Energy Buildings) buildings are becoming the new standard in public and private buildings. These buildings use solutions such as advanced thermal insulation, efficient ventilation, solar panels and automation to minimize energy consumption, contributing to carbon neutrality and long-term savings.

Bureaucracy and Urban Planning Licensing

Challenges in the approval process

One of the obstacles most cited by real estate developers and builders in Portugal is the slowness in the urban licensing process. The complexity of legal procedures, the overlapping of competencies between entities and the lack of digitalization make the process lengthy and unpredictable.

Measures to accelerate licensing

With the objective of unlocking the sector, the government has promoted reforms to simplify and digitize administrative procedures. The creation of single municipal branches, integrated electronic platforms and maximum response times are some of the solutions being implemented to make licensing more efficient, transparent and agile.

Conclusion

Summary of the main ideas

The construction sector in Portugal is experiencing a moment of profound transformation, driven by strategic investments, environmental requirements and technological advances. Despite structural challenges such as labor scarcity and bureaucracy, there are clear signs of evolution towards a more sustainable, efficient and competitive model.

Pathways to a more resilient and sustainable sector

To guarantee the success of this journey, it is essential to continue to invest in professional qualification, technological innovation and reduction of bureaucracy. Construction in Portugal, if well directed, can not only respond to housing and infrastructure needs, but also be a powerful lever for economic and environmentally responsible development.