In view of persistently high construction demand and a noticeable shortage of skilled labour, productivity in the German construction sector is increasingly coming into focus. A study by the German Institute for Economic Research (DIW Berlin) on behalf of the Bertelsmann Stiftung now highlights substantial performance reserves within the industry. If less productive companies were to catch up to the level of comparable firms, real construction output could be increased by around twelve per cent without hiring new staff.
For this purpose, study authors Martin Gornig and Alexander Schiersch analysed the development of gross value added by sector and company size since 2010. This reveals a structural downward trend: in 2025, labour productivity in the construction sector was nearly 30 per cent below the 2010 level. This decline affects all sub-sectors and company sizes equally, whereas productivity in the wider economy and in manufacturing increased over the same period. This trend was exacerbated by the consequences of the coronavirus pandemic as well as the interest rate and cost shock following the war in Ukraine.
Performance differences and calculated reserves
Based on anonymised company data for 2022, the economic researchers identified severe differences even between businesses of identical size and focus. Raising below-average performing firms to the median level of their respective peer group would purely mathematically equate to the labour output of nearly 350,000 additional full-time workers.
The variations are particularly pronounced among smaller enterprises, which account for around 70 per cent of firms in certain construction divisions. As Alexander Schiersch explains, there are small market participants in every segment that possess high productivity and can keep pace with large corporations. A key factor in closing this efficiency gap therefore lies in the transfer of proven practices within the industry.
Levers for modernisation and public framework conditions
To bring about a sustainable turnaround, Martin Gornig calls for the faster and widespread adoption of technologies that are already available. Alexander Schiersch also suggests reassessing the use of robotics on construction sites: if machines are augmented by robotic systems, substantial productivity gains could be achieved. In parallel, the analysis also identifies clear scope for action on the part of public sector clients.
- —Noticeable reduction of secondary bureaucratic burdens for contractors
- —Alignment of public procurement procedures with innovation-friendly criteria
- —Targeted initiation and funding of technology-oriented pilot projects
Martin Gornig emphasises that the construction industry must expand its capacities through productivity gains. Only in this way can it be prevented that planned billion-euro public infrastructure investments result primarily in price increases rather than additional construction volume.
