The construction industry is under massive pressure. High interest rates, rising construction costs, and a lack of investment are driving construction insolvencies upwards. More and more companies are getting into trouble. This trend is sweeping through all German states and highlights the depths of the construction crisis. Demand is plummeting dramatically, especially in residential construction.
Hesse as a focal point of the wave of insolvencies
In the first half of 2025, Hesse recorded 189 construction insolvencies. No other sector there recorded similarly high losses. The construction industry is suffering from a decline in orders and enormous cost pressure. Smaller companies without reserves are increasingly losing their footing.
Berlin also reports grim figures. Associations speak of a “worrying situation.” Residential construction, in particular, is far below previous levels. While the trend is milder in Brandenburg, fears of a coming wave of bankruptcies are growing there as well.
Bavaria and North Rhine-Westphalia on a Downward Trend
Bavaria already registered sharp increases in 2024, but bankruptcies will continue to climb in 2025. The construction crisis is particularly affecting the real estate sector, with projects failing and banks withholding loans.
In North Rhine-Westphalia, company bankruptcies rose by 17 percent in the first half of the year. Officials make it clear that the construction industry there is particularly affected. This dynamic indicates a continuing wave of bankruptcies affecting numerous construction companies.
Southern Germany and Lower Saxony with rising construction bankruptcies
In Baden-Württemberg, bankruptcies increased significantly in the first quarter of 2025. Construction companies are coming under pressure due to high costs, while investors are hesitant. Here, too, residential construction is a critical point.
Lower Saxony reported an increase of almost nine percent. With 168 cases, the construction industry leads the bankruptcy statistics. This trend clearly demonstrates that construction insolvencies are no longer just a regional phenomenon, but part of a national wave of insolvencies.
Eastern Germany Faces Dramatic Construction Crisis
Saxony already recorded a significant increase in insolvencies in 2024. The negative trend continued, especially in construction. Thuringia reported a 23 percent increase in the first quarter of 2025. At the same time, investment in residential construction collapsed by a third – a core problem of the current construction crisis.
Nationwide Dimension
Across Germany, corporate bankruptcies rose by 12.2 percent in the first half of 2025. With 52.3 insolvencies per 10,000 companies, the construction industry is one of the hardest hit. Experts predict that without countermeasures, construction insolvencies will continue to rise and the wave of insolvencies will shake the foundations of the entire economy.