Growing need for foreign workers, and housing

13.05.2022 - 15:14
Mynd: Hjalti Haraldsson / RÚV
The number of overseas construction workers coming to Iceland continues to grow, as the provision of new homes on the market remains at an historic low. At the same time, the tourism industry also envisages needing thousands of extra workers from other countries.

Nearly 500 foreign construction workers are registered as employed by staffing agencies in Iceland, and increased by 100 in a month. Among the explanations is the growing number of residential properties under construction. 

Half as many homes for sale 

The number of homes for sale has halved in a year, according to the housing and infrastructure agency. In March last year, the number of homes for sale in Iceland dropped below 2,000 for the first time—but now there are fewer than 1,000 for sale. In the capital, the number of homes being advertised has dropped from around 2,000 to 450 since 2020, and from 800 to 250 in the rest of the country. 

According to the housing agency, 3,300 new homes are needed right away. Around 5,800 are currently under construction, but that number should be 8,000, the agency claims—adding that 1,900 new homes will be needed per year for the next two decades; around 38,000 in total. 

More foreign workers 

Can the construction trade keep up? Sigurður Hannesson, the managing director of the SA confederation of industry, says it is clear more land and more hands are needed, and that calls for help from overseas. 

According to Vinnumálastofnun (the Directorate of Labour), the number of foreign citizens working in construction continues to rise each month. Some 20-30 construction companies directly employ around 200 overseas employees, but many more come to Iceland through agencies: close to 500 at 17 different agencies. The unemployment rate among foreign citizens living in Iceland has dropped by over 600 people. 

Tourism also needs people 

The Icelandic tourism industry will require 7,000-9,000 foreign workers this year and next in order to be able to welcome the forecast number of tourists, according to the head of the Icelandic Travel Industry Association. 

Isavia this week published its first air travel forecast since before the pandemic which shows a faster-than-anticipated recovery in passenger numbers. The head of the hoteliers’ association says the industry’s most optimistic predictions are coming true. 

Kristófer Oliversson says that some days, in some regions, it can be hard to find a hotel room, but that the constant development in the industry is making the provision of hotels more robust, so that travellers less often find no room at the inn. 

More, and better, hotels mean more staff, and Kristófer says there is a constant need for more people—especially waiting staff and chefs. Many people left the industry during the pandemic and, while some staff are returning, around 70-80 percent of workers are brand-new. He adds, that while forecasts are positive, it cannot be forgotten that the hotel industry was one of the worst affected by the pandemic. 

Jóhannes Þór Skúlason, the leader of the travel industry association, says capacity is a major headache: “I would say that generally there are very many people who were working in tourism before the pandemic that have left the trade. Around 9,000 people at the end of 2021 had disappeared compared to 2019—that’s half Icelanders and half people from overseas.” 

As well as hotels, there is also a need for staff at restaurants and cafés, tour guides, and more. According to Hagstofa Íslands (Statistics Iceland), around 33,000 people worked in tourism before the pandemic. 

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