The sector experienced a significant decline in 2022, with 71% fewer craft businesses established and employment down by 30%. These key figures for the craft industry were unveiled in Kirchberg on Thursday by representatives of the Chamber of Skilled Trades and Crafts.
While the situation is not yet a crisis, several indicators are in the red, with redundancies already looming, particularly in the food and construction sectors.
Max Urbany, economic advisor to the Chamber of Skilled Trades and Crafts, said that “one in five companies say they want to reduce their workforce in 2023. These are mainly non-replacements of people retiring.”
The survey conducted by the Chamber of Skilled Trades and Crafts during the first quarter of 2023 shows that the food sector will be the most affected: 31% of employers are thinking of reducing the number of their employees. In the construction sector, 21% of companies will reduce their workforce in 2023.
At a meeting last weekend with Minister for Small and Medium-Sized Enterprises Lex Delles, “the heads of companies in the construction sector confirmed that, given the situation, a retired worker will not be replaced”, said Tom Wirion, director of the Chamber of Skilled Trades and Crafts.
However, Wirion insisted that “for the time being, these are not redundancies.” But after the wave of bankruptcies among developers and estate agents in the first quarter, there is a fear of “the domino effect. After the developers comes the construction industry,” Urbany noted.
The number of bankruptcies recorded in the first quarter of 2023 is “10% higher” than in the same period last year. The effects of the downturn, which is primarily affecting micro-enterprises and small businesses (nine to 49 employees), are also being felt in hairdressing and beauty salons, where customers are allowing much more time between appointments.
In car workshops, the situation is complicated by delivery times, and the uncertainty of customers who no longer know which car to choose, or who are reluctant to take out a loan because of rising interest rates.
In the entire food sector, which includes bakers, butchers, caterers, and food salons, a reduction in the average expenditure per visit has been noted: “People are buying less,” says Tom Oberweis, President of the Chamber of Skilled Trades and Crafts. He explains that the sector is “squeezed by the price of raw materials,” as well as by the burden of wage costs.
The outlook is particularly bleak for the construction sector, with the authorised construction volume on the decline and 39% of companies having orders for at most three months into the future. The sector fears a “serious crisis” following collective leave.
Sector representatives are urging politicians to take action. The Chamber of Skilled Crafts and Trades has criticised the government for not proposing any solutions to the sector’s challenges, except for the initiative for the purchase of construction projects.
The Chamber is also opposed to the idea of capping yield on rents, arguing that this would scare off investors.
Despite the current challenges, the Chamber is optimistic about the long-term prospects for the sector, pointing out that craft businesses will play a critical role in tackling the structural challenges of housing, mobility, and the energy transition.
