No recovery in sight
Craftsmanship calls for growth impulses
May 3, 2024, 8:23 a.m
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A weak construction sector and weak industrial demand are putting a heavy burden on the trades. The responsible central association is demanding more commitment from politicians. He already has a few suggestions for reforms at hand.
There is no noticeable upswing in sight in the craft sector. “There can be no talk of an economic easing in the overall trade,” said Jörg Dittrich, President of the Central Association of German Crafts (ZDH). “The pressure for politicians to act has not diminished in any way.” The federal government must strengthen the competitiveness of the location. According to a new economic survey, the business situation in the skilled trades sector deteriorated noticeably in the first quarter of 2024.
The reason for this is, in particular, the weak construction sector and weak industrial demand, it said. Overall, only 43 percent of companies reported a good business situation. Business expectations did not indicate any economic recovery in the overall trade sector for the current quarter. However, the situation is twofold.
On the one hand, the construction industry is suffering from weak housing construction and delays in energy and climate transformation. Industrial suppliers would be burdened by the German economy’s weak exports. On the other hand, consumption appears to be recovering, from which the other craft sectors benefited to a greater or lesser extent. However, due to the large weight of the construction and finishing trades in the overall trade, it is to be expected that sales will fall again in real terms for the year as a whole.
“Bold, medium-sized business-oriented growth package”
“If the craft businesses that run their business on site every day report in large numbers that their orders are falling, their sales are falling, the number of employees is decreasing and they are not making investments because of too much uncertainty and a lack of reliable planning and funding conditions, then These are facts and not badmouthing the situation,” said Dittrich, referring to Chancellor Olaf Scholz. He had repeatedly warned against badmouthing the location. Dittrich called for a “courageous, medium-sized business-oriented growth package”. In the upcoming negotiations on the 2025 federal budget, the government must give priority to investments in the future, i.e. more education and measures that strengthen Germany in competition.
The crafts president cited a high burden of taxes and duties that affects medium-sized businesses across the board. “The same applies to the bureaucracy, which puts a particular strain on the trades, especially due to the relatively small size of the company: In the trades, the documentation, reporting and proof obligations in most cases lie solely on the desk of the business owner. In contrast to many large businesses Corporations simply cannot afford to have their own departments just to deal with bureaucracy.”
However, the budget negotiations within the federal government are likely to be difficult because the coalition has to close billions in holes. The FDP has rejected calls for a reform of the debt brake. It is unclear what exactly a new growth package might look like and what relief volume it will have. The federal government recently slightly increased its growth expectations for this year to an increase of 0.3 percent. The signs of an economic improvement have increased significantly, said Federal Economics Minister Robert Habeck.