Sunday, April 5, 2020

Corona brings handicraft sales slump by more than 50 percent

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Around 16 percent of the craft businesses are affected by official closings.


(Photo: dpa)

Berlin Not so long ago, the craft could hardly save itself from orders. But the corona epidemic changed the situation in a very short time. It brings about three out of four handicraft businesses (77 percent) sales down, shows a survey of the Central Association of German Handicrafts (ZDH), the results of which are available exclusively to the Handelsblatt.

55 percent of those questioned complain about canceled orders, 36 percent about lack of staff, for example because employees cannot appear for work due to their own quarantine or lack of childcare. 16 percent of the craftsmen, especially those with their own shop, had to close their business due to official requirements.

Almost 4,900 companies took part in the survey from March 23 to 25. “The corona crisis hit the craft with full force and across the board,” commented ZDH President Hans Peter Wollseifer on the results.

Without state bridging aid, numerous companies would face the end – with the result that market structures that had grown over the years would collapse. “This in turn would jeopardize the basic supply of handicraft services and products after the crisis,” warns Wollseifer.

The automotive, but also the health or food, as well as personal services are particularly affected by declining sales. Even in the main construction sector, which continues to operate relatively normally, a good six out of ten craft businesses complain about falling sales.

The quota of canceled orders is now 45 percent

Because private customers also cancel family celebrations or installer appointments for fear of being infected with the virus, the quota of canceled orders is now 45 percent. On average, the companies surveyed saw sales drop by 53 percent.

Almost every third company is currently experiencing difficulties in supplying urgently needed materials, intermediate products, components or operating resources due to interrupted supply chains. The construction and finishing trades as well as the trades for commercial needs and the automotive sector are particularly affected.

In view of the difficult skilled worker situation in the trades, companies try to keep their employees. 42 percent want to react to the current crisis by reducing working time accounts. 43 percent send at least part of the workforce on vacation, while 58 percent see short-time work as a suitable option.

Handelsblatt Morning Briefing - Corona Spezial

After all, eleven percent of the craft businesses surveyed do not rule out the dismissal of employees. 18 percent consider temporarily closing their own operations.

Of the state aid that the government and parliament have passed at record speed, the craftsmen surveyed consider non-repayable grants to be the means of choice. 69 percent named this support instrument. Because of the small-scale structure of the craft, loans or credits would only be of limited use to many companies, according to the ZDH.

Worry about loan repayment

In addition, tradesmen often feared that they would not be able to repay the loans after the economic weak phase had been overcome. The easing of short-time work benefits (61 percent) that has already been implemented, at least in part, and the planned tax deferrals (55 percent) are largely welcomed.

“It is crucial that the aid measures decided by the politicians at a turbo pace are now implemented as quickly as possible by the administration, authorities and banks, for example in the application process,” warns ZDH President Wollseifer. Only then would the companies have a chance to survive the crisis and then quickly resume production.

This is all the more true as the situation worsens dramatically. Well over half of the tradesmen surveyed report that sales declines and order cancellations have increased again compared to the previous week.

More: SMEs are the backbone of the German economy. But many small businesses are particularly hard hit by the corona virus. What you are asking now.

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