Building on Tradition: The Role of Family Businesses in the UK Construction Sector

AnalysisArticle
Written By Martin Kemp

Family businesses form the foundation of the UK’s private sector—they account for 93.2 per cent of all private firms and 57 per cent of all private sector employment, a total of 15.8 million jobs. This article reveals evidence on family firms in the construction sector, drawn from the latest family business sector report by Cebr and the Family Business Research Foundation (FBRF).

Family businesses make a substantial contribution to the UK economy, generating £2,805 billion in turnover and £985 billion in Gross Value Added (GVA). Cebr estimate family firms contributed £422bn in taxes in 2023 (family employers; micros without employees excluded under PwC’s TTC methodology).

Nowhere is the concentration of family ownership more pronounced than in construction, where family-owned enterprises play a defining role in employment, economic output, and industry stability. The construction sector has the highest number of family-owned businesses of any UK industry, with 833,188 family businesses—representing 95.7 per cent of all construction businesses in 2023. Among these, 156,888 have employees, which means that 80.9 per cent of employing firms in the sector are family-owned.

The economic impact of family-run construction businesses is considerable:

  • Turnover: Family construction firms generated approximately £293 billion in turnover in 2023, accounting for 10.4 per cent of total family business turnover.

  • Share of private sector turnover: 72.0 per cent of the construction industry’s private sector turnover was generated by family businesses, reflecting the large concentration of family ownership in the industry.

  • Gross Value Added (GVA): Family-owned construction firms contributed £117.5 billion to GVA, which is 85.3 per cent of the private sector’s GVA in this industry.

  • Employment: These businesses provided jobs for 1.67 million people, making up 80.8 per cent of employment in the construction industry.

  • Employee compensation: Total employee compensation in family-owned construction firms amounted to approximately £39.4 billion in 2023; average per-employee annual salary paid by family employers in construction was £28,494.

In summary, the UK construction sector has a notably high concentration of family-owned businesses. The latest evidence from the FBRF underscores the importance of these firms in driving stability and growth within the sector, highlighting the need for policies that support their sustainability and expansion.

The report State of the Nation: The UK Family Business Sector in 2023 provides a comprehensive analysis of the demographics and economic contribution of UK family firms. The report can be downloaded free of charge from https://www.fbrf.org.uk/reports/state-of-the-nation-23.

Dr Martin Kemp, Family Business Research Foundation.

Martin Kemp https://www.fbrf.org.uk