The mood at the recent Expo Real trade fair was better than last year. However, the crisis in the property sector, and therefore also the German construction industry, is not yet over. Inflation and higher interest rates deprived the sector of its basis for growth three years ago. The number of building permits has fallen drastically, transaction volumes on the property market have collapsed, and numerous construction projects have been put on hold or cancelled altogether.

However, Frank Steffens, CEO of the Brüninghoff Group, which specialises in hybrid construction, is far from gloomy: „Next year, demand for construction will rise again. That's as clear as daylight,“ he says confidently, adding that this is more than wishful thinking, because interest rates are continuing to fall and, the industry needs to take action.

After several years of crisis, companies have now found ways to adapt to the new circumstances. „Companies will not die. The basic instinct of an entrepreneur is to survive,“ says Steffens, who is himself the son of a building contractor.

He does not believe that new industrial buildings will be built on a large scale. But that is not the point. The order of the day motto is refurbishing existing buildings, since every company is now looking at its existing space. Supply chains are being reclaimed, new business models are emerging, and the much lamented shortage of skilled labour is forcing companies to rethink, and often giving them creative ideas. Some companies are building employee housing again, while others are focussing on daycare centres or company canteens in order to retain employees, or bring them back to the campus.

„In the wake of the megatrends of the last 20 years, the first steps towards adaptation are being taken. This is where the construction volume comes from,“ says the 45-year-old, pointing out that companies that access the capital markets in particular need ESG-aligned buildings. This is precisely where Brüninghoff's orders lie, since the Münsterland-based company prepared early for today's issues. „For six years now, there has been no product that is not recyclable or circular,“ Steffens explains with satisfaction. All products are now ESG-aligned.

However, it is also true that Brüninghoff is not a traditional construction company. „We develop components and processes to create affordable living and working space,“ summarises the company boss, referring to the Group's high level of industrialisation. The pure construction business still accounts for three quarters of the Group's turnover of 200 million euros. However, the crucial point is the production of prefabricated components, with a specialisation in hybrid prefabricated parts. These are construction elements in which different materials such as wood, concrete, steel and aluminium are combined.

The group of companies, which celebrates its 50th anniversary in 2024, emerged from Josef Brüninghoff's joinery business. The small craft business with three employees has now grown into a group of companies operating throughout Europe with a workforce of 700 people that organises the entire life cycle of a building, from planning and construction to dismantling. This has also changed the target groups. „Suddenly I have insurance companies as customers because they understand that we organise the entire life cycle of a building,“ explains Steffens. Sustainability, financing and digitalisation consulting are also part of the range of services, he explains.

However, the increase in employment, and thus the Group's growth, will not continue at the same pace as in the past in the coming years. The number of employees is expected to remain constant until 2030. No major expansion is planned. What is to be increased, however, is efficiency. The aim is to achieve twice the output with the same people. This can only be achieved through further systematisation, says Steffens, referring to the even greater thinning out of the range of prefabricated components ,while simultaneously expanding volumes. The challenge lies in striking a balance between volume and vertical integration in order to achieve the company's goals. „We have achieved this in recent years through ever greater systematisation,“ he explains.

While Brüninghoff initially specialised in pure hall construction, it now serves all asset classes. Starting with industrial and commercial construction, through sports and leisure facilities – especially indoor riding arenas - to office and residential buildings. The broad positioning on the customer front goes hand in hand with focussing on production. The components are highly standardised across all applications. This reduces complexity and costs.

And that is what matters. This is the only way to balance the market's price expectations with the (rising) costs, explains the industrial engineering graduate, who keeps a close eye on the company's operating margin. „We need the margin for reinvestments and to maintain our cost leadership.“ The Brüninghoff boss claims this cost leadership for his company, at least in hybrid timber construction.

In contrast to traditional construction companies, the company is characterised by the extremely broad deployment of its own employees. This is both a risk and an opportunity. „The market entry threshold for construction companies is very low. Brüninghoff is different. I have to make sure that the capacity utilisation is right,“ says Steffens. That's why his top priority is to keep the 700 employees in work –regardless of the demand cycle. As a result, change has become the norm. „We got through the crisis thanks to our high level of adaptability,“ says Steffens, adding, ’because we started building flats again three years ago. Before that, residential construction only played second fiddle, as there was high demand from commercial and industrial construction.

„Change is normal, we had to learn that,“ admits the CEO. Change – for example, focusing on a new target group – always means investment and therefore a dip in results in the transition phase. Today, however, the shift to socially subsidised housing is paying off: „We are now at full capacity,“ says Steffens.

The Münsterlanders (the company headquarters and the majority of employees are in Heiden, a community of 8,600 people in Westmünsterland) have benefited from this holistic approach. The federal government, states and municipalities have increasingly started to conclude framework agreements, especially in the industrial sector. This will now also be transferred to housing construction, explains Steffens. The market needs affordable solutions. „Cost savings do not come from wages and materials, but from the overall process. The fewer players involved, the cheaper it becomes,“ explains Steffens.

The shortage of skilled workers in construction, which is so often complained about, is not a major issue for Brüninghoff. This is because the group has focused on being a training company for 50 years. Every year 15 to 20 trainees are added in 14 training professions. The trainees make up more than 10% of the workforce. Steffens therefore has no understanding for the lamentation of some colleagues who did not provide any training places. „This is an investment that cannot be written off,“ says the Brüninghoff boss.