LISBON, July 20 - Jose Simao arrived in Portugal from Angola in 2022 to work as a bricklayer, part of a wave of immigration providing a welcome boost to the country's deeply understaffed construction sector.

Today, he doesn't know if he will be allowed to stay.

"I did everything the authorities asked of me, and I'm here legally. But the government changed the rules. I'm afraid they'll send me back," he told Reuters.

Portugal's hardening immigration stance — part of the government's attempt to fend off an ascendant far right — is choking the labour supply for construction firms even as they work to alleviate one of Europe's worst housing crises.

The centre-right coalition government argues it wants to restrict "uncontrolled inflows" of migrants and ensure dignified conditions for those already living in Portugal.

But construction company executives and industry groups told Reuters the measures have worsened an acute shortage of workers, undermining efforts to meet demand for affordable housing and endangering a sector that makes up nearly 8% of the economy.

"The government has restricted immigration too much and too quickly given the country's needs," said Oscar Afonso, an economics professor at the University of Porto. "It was a political choice, but immigrants are essential to the economy."

SHIFTING TO THE RIGHT, PORTUGAL CURBS IMMIGRATION

Hundreds of thousands of foreign workers came to Portugal after 2017 when the previous centre-left government allowed them to enter without work visas and then apply for residency after a year in a job with proof of social security contributions.

Between 2021 and 2025, the number of foreign residents more than doubled to a record 1.6 million, or 14% of Portugal's population.

They provided relief for builders, who have seen many of their Portuguese workers leave to earn more money in wealthier EU countries. Foreigners now account for some 30% of the sector's workforce.