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Craftsmanship prices will continue to rise

2022-05-13T06:37:21.956Z

Despite the economic sanctions against Russia, handicraft businesses in Germany have full order books. They still feel the effects of the Ukraine war.



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Façade work in construction: Customers find it difficult to deal with price increases

Photo: Andreas Arnold / dpa

Customers have to be prepared for rising costs for tradesmen's services.

Supply bottlenecks and the start of the Ukraine war have caused manufacturing and labor costs in many companies to rise even more sharply than in the previous quarters, writes the Central Association of German Crafts (ZDH) in its current economic report.

To this end, the chambers of crafts surveyed companies throughout Germany.

According to the ZDH, almost two thirds (64 percent) of the companies had to increase their sales prices in the past quarter.

In the same period last year it was only 33 percent.

Only three percent would have lowered prices.

"Due to the sharp increase in procurement prices, a record number of craft businesses have to increase their sales prices - but without being able to pass on the increased costs in full," said ZDH General Secretary Holger Schwannecke.

According to Schwannecke, many companies, especially in the construction and automotive sectors as well as commercial needs, have already suffered war-related, sometimes significant sales losses.

And also as a result of order cancellations because customers were not willing to accept higher sales prices due to increased procurement and energy prices.

Less profit despite higher prices

All in all, the ZDH said that the direct consequences of the Ukraine war were less of an impact than other economic sectors.

After all, the craft achieves its sales mainly in Germany, only seven percent abroad.

According to an extra survey by the ZDH on the subject, 59 percent of the companies reported that their sales have not yet fallen as a result of the Ukraine war.

According to Schwannecke, however, companies reported almost everywhere about the difficulties in procuring tools and raw materials.

"For the majority of companies, the price explosion means that existing orders become uneconomical."

According to the survey, 41 percent felt the consequences of the war in the form of falling sales.

14 percent of those surveyed reported shortfalls in raw materials, materials or preliminary products because suppliers in Belarus, Russia or the Ukraine had lost their jobs.

This leads to production delays or even failures.

optimism gone

“The optimism that was felt everywhere in the trades at the beginning of the year that they would be able to return to the old economic strength in the course of the year has largely evaporated, especially since the outbreak of the Ukraine war,” said Schwannecke.

The course of the war with the associated uncertainties in deliveries and prices are "a significant risk factor" for further economic development in the trade.

"The trade is currently fighting its way through economically turbulent times with a strong headwind," said Schwannecke.

"Consequences of the corona pandemic, material and delivery bottlenecks, drastic price increases, inflation, a lack of skilled workers and, since the end of February, the effects of the brutal Russian attack on Ukraine, are affecting the trade and now also the local construction industry." This is particularly worrying because the construction have so far proven to be a stabilizing economic anchor in the pandemic.

Politicians are asked to provide a reliable funding framework, among other things.

Schwannecke called for more flexible contracts and pricing for public contracts, help with rising energy prices and more appreciation and financial support for vocational training.

In order to manage the conversion to a more climate-friendly economy, significantly more skilled trades will be needed in the future - and they are already in short supply.

mik/dpa-AFX

Source: spiegel

All business articles on 2022-05-13

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