Company succession in the construction industry

The construction industry is an essential pillar of the German economy, both in terms of its contribution to gross domestic product and overall employment. Due to the observed increase in the average age of business owners, it can be assumed that more and more entrepreneurs will be affected by succession planning in the coming years. However, to date, there has been no estimate or survey that provides reliable information on how many companies in the construction industry will be faced with succession planning in the coming years and what economic effects can be expected as a result.

To close this research gap, DIW Econ and the Institut für Mittelstandsforschung (IfM) Bonn were commissioned by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) to investigate the business succession situation in the construction i

The survey results show that almost 47% of all owners in the construction industry plan to retire from their business in the period from 2021 to 2030. However, only around 12,000 to 15,000 of the 163,000 company owners with plans to retire will actually be continued. The majority of the mostly small businesses will probably be shut down.

According to the study, serious negative economic effects on construction projects throughout Germany are not to be expected. A large proportion of the jobs lost as a result of closures and the orders placed by the companies concerned are likely to be absorbed by other companies in the construction industry, companies from different sectors or, in some cases, from abroad.

However, the calculations also show that due to the additional unplanned company closures, the gross value added generated directly by the construction industry is expected to fall by around 6%. This corresponds to an absolute amount of 12.2 billion euros.

Press release