Business: bad mood and more and more bankruptcy in the craft

The mood in German craft is as bad as it has not been in 15 years. The business camp index for the craft levied by the Creditreform information agency has already fallen the third year in a row with 45.8 points. In 2024 it was still 48.3 points, in the pre-Corona year 2019 even 76.6 points.

The driver of poor development is above all the negative development in construction and expansion. The evaluation also deteriorated in the automotive trade, but at a relatively high level. In other areas such as metal craft or food as well as in personal services, the mood improved.

This is also noticeable in the development of sales: Here, the proportion of companies that reported declines prevailed just opposite those with an increase. But here there are first signs of stabilization, as the head of Creditreform Economic Research, Patrik-Ludwig Hantzsch, says. “The sales forecasts of the companies are no longer as pessimistic as in the previous year. Nevertheless, the craft does not expect a noticeable recovery in the near future.” 24.3 percent that expect an improvement are compared to 22.8 percent that arise from a decline.

As a further positive signal, Creditreform consider an increase in willingness to invest. The proportion of companies investing climbed from 41.5 to 49.2 percent and thus reached the highest level in years. According to Hantzsch, this also has an impact on the craft: “Although a rapid economic recovery is unlikely, the craft together with internal demand could help stabilize the economy,” he says.

How difficult the situation in the craft was last year can also be seen from the number of bankruptcies. According to an estimate of creditreform, it rose by 18.9 percent to 4,350. This is an increase of 690 compared to the previous year and the highest value since 2016. The highest bankruptcy rate was carried out in the building trade with 101 bankruptcies per 10,000. And it could get worse: “Many craft businesses, especially in the construction area, break the orders,” says Hantzsch. “At the same time, the costs for loans and personnel rose. Many collapse under this double burden. Therefore, we are expecting increasing number of bankruptcy in the coming months.”