Semrik: You issued a warning even before October 7th. Events are still unfolding and it seems that tens of thousands of people are currently absent. If people don't come to work in the construction industry, what might happen?
Moyal: Listen, it's like a massive attack. Today, there is a shortage of 120,000 workers at construction sites. Some of the foreign workers fled due to what happened. A significant portion, 97% of Palestinian workers, can't enter to work in the country. And there are many construction projects at this time, many companies; you need skilled hands to meet deadlines, not only in residential construction projects but also in construction of schools, public structures, industry, infrastructure, and more. There's a very serious slowdown. I have no doubt that companies that won't be able to meet deadlines and won't be able to function will collapse. Unfortunately, I'm already hearing about four construction companies—I won't mention their names—that announced that they are halting operations. They are going to close down. The Israeli workers in these companies? Because there's a shortage of workers, they'll also lose their jobs. I've issued warnings about all these things; everything is documented.
Semrik: Within these warnings, the red alert you're declaring loudly in this interview. If those four companies collapse, and perhaps others, especially given the already-high interest rates, the banking sector's influence on companies becomes very pronounced. What might happen?
Moyal: To put it simply, the situation is not good. The interest rates are exceedingly high, the timetable is extending, and prices will rise. I'm beginning to notice another worrying phenomenon—companies are starting to buy workers. Contractors are offering higher wages to entice workers to join their companies - 'I pay more, just come work for me'. A competition of sorts is starting among the contractors, and the result is an increase in prices. Someone will bear the cost, and it will be the citizens. Those companies will sell the same apartment for more money. The costs will be higher, and the citizens will be the ones to bear the brunt of the increase. The same applies to the professionalism of the workers. It won't be the same kind of construction. We lack skilled workers. As a result, the high costs and the shortage of skilled labor will lead to a decline in the quality of construction. I hope they won't cut corners just to meet deadlines. Therefore, I addressed the Prime Minister, the Minister of Housing, the Minister of the Interior, and also the Minister of Labor in a very sharp letter. In it, I asked them to establish a very serious cabinet that would examine the critical issue and provide solutions and responses to the dire shortage of skilled workers in the construction industry.
Although there has been some limited progress, it is sluggish and incremental. Instead of waiting for the workers that we don't know when and if they'll return to the country, let's bring in foreign workers now. Who will be adversely affected? As it stands, the Construction Workers Welfare Fund, which is instrumental in providing training, will suffer as well because its entire revenue stream is derived from the collective labor agreement. Those workers, who are non-existent today, and for whom the fund does not currently collect payments, will be unable to contribute to the fund unless the state steps in to provide support. Consequently, if the state does not aid the fund, I won't be able to continue my current efforts to bring and train Israeli workers in the construction industry.
Semrik: This entire process may further devolve into the construction of unsafe apartments, with untrained individuals participating in the building process. This will also inevitably lead to a substantial increase in housing prices, subsequently resulting in a surge in the cost of living for all of us. So, essentially, you are advocating for an "Iron and Cement Dome" measure of sorts that could effectively save the construction industry in Israel. If you were in the Prime Minister's position, what would be the initial decision you would undertake to steer this ship away from the metaphorical Titanic iceberg you're currently describing? What needs to be implemented?
Moyal: I recently heard about plans to establish a cabinet specifically addressing the housing issues. When these plans will come to fruition remains uncertain. However, I have a suspicion, as I did before, that the government still does not fully comprehend the magnitude of the impending disaster facing the construction industry. We are on the brink of a tsunami of company collapses. Let's assume we need to lower interest rates. To salvage the industry, we must take several critical steps: First, we need to assist these companies in reducing interest rates. Second, we should advise the banks to remain calm; this is not a typical period. They have already begun making provisions for losses, forfeiting guarantees. Perhaps they should now assess the resilience of these companies, allowing them a broader range of loans and altering their credit policies. While it is true that a bank is a shareholder seeking to maximize profits, the state's involvement is imperative.
Consequently, the state must intervene in all aspects of the banking sector. Without explicitly naming any companies to avoid any reputational harm, we've witnessed instances where the bank triggered a freeze in company proceedings. The third aspect could be a consequence of the economic situation or the repercussions of the dark day that was October 7; perhaps the state should address everything related to the issue of tenders. For instance, extending the tender period or offering compensation to employers. As chairman of the Construction and Related Industries Workers Union I witnessed one of the regrettable decisions made by the government during this period, and can affirm that we need to take innovative steps to rescue the industry.
You are invited to watch the interview on ContentoNow's digital TV studio, hosted by Netanel Semrik: https://youtu.be/Y4WQ56NmhXg
Media Contact
Company Name: ContentoNow
Contact Person: Netanel Semrik
Email: Send Email
Phone: +972-35616666
Country: Israel
Website: www.contentonow.com
