German handicrafts are not keeping up with overall economic developments. Experts are forecasting lower sales and falling employment for this year as well.
The German skilled trades sector is expected to lag behind the economy as a whole this year. According to the current handicrafts report by the Leibnitz Institute for Economic Research (RWI), companies can expect a slight recovery in their sales. Adjusted for inflation, however, sales fell compared to previous years. A decline in employment is also to be expected.
The report sees reasons for the weaker development of the trades, among other things, in the energy crisis. “Increased interest rates, energy and raw material prices have hit the trade hard,” said RWI scientist Jochen Dehio.
Weak years already in 2021 and 2022
According to the RWI study, nominal turnover in the skilled trades has also risen less sharply than turnover in the economy as a whole in the past two years. Adjusted for inflation, they were even around 10 percentage points lower in 2021 and 2022. In the first Corona year 2020, on the other hand, the trades sector was able to increase its sales and thus outperformed the general economy by around five percentage points.
Employment in handicrafts also decreased. In 2020-2022, it fell by 2.6 percent, while the overall economy saw an overall employment increase of 0.6 percent.
“Situation is beginning to improve”
According to the RWI, however, the prospects for the skilled trades are rather positive. Energy markets are expected to continue to settle down, supply chains to normalize and material shortages to ease, the report said. An increased demand for craft services is to be assumed, among other things, due to the heat transition.
However, the experts are not giving the all-clear: “The situation is beginning to improve,” said Dehio. “But the shortage of skilled workers is likely to remain a major challenge in the coming years.”