The business climate for skilled trades in North Rhine-Westphalia has stagnated for three years.

Even at the start of the new year, the economy in North Rhine-Westphalia's skilled trades sector is not picking up. At the annual press conference of Handwerk.NRW, President Andreas Ehlert reported stagnant economic development with little optimism for the near future.

At the start of the year, the economic situation in the skilled trades sector in North Rhine-Westphalia remains tense. It continues to show no signs of growth, explained Andreas Ehlert, President of [organization name missing]. Crafts.NRW, at the annual press conference. Since 2023, the business climate for skilled trades in North Rhine-Westphalia has stagnated, and no noticeable improvement is in sight.

Many sectors are experiencing declines in sales and orders. "While we expect a slight nominal increase in sales for the current year, in real terms – that is, adjusted for inflation – it is likely to stagnate or even decline slightly," said Ehlert. The expectation is that employment will also fall by about 1,5 percent due to demographic factors and the difficult economic situation.

Full focus on economic policy

Andreas Ehlert Photo: © Ingo Lammert

The federal government has announced numerous measures intended to support the economy. However, these measures have yet to have any noticeable impact on small businesses. Ehlert stated: "There's a lack of consistency when it comes to reducing bureaucracy. Neither the mandatory receipt requirement nor the ban on Sunday baking for bakers has been lifted – even though both were agreed upon in the coalition agreement." The same applies to the promised reduction in electricity tax.

"What was intended as a reduction in electricity tax for all businesses has ultimately become an industrial electricity price for a few large corporations – financed by all taxpayers," said Ehlert. "Individual subsidies and automotive summits are not enough – we need a fundamental agenda for growth that puts small and medium-sized enterprises (SMEs) at its center," he demanded. "From now on, the focus must be entirely on economic policy."

New debt without new growth

The approved pension package disappoints the skilled trades and creates additional burdens for businesses without initiating important structural reforms. The hoped-for impact of the special infrastructure fund also risks being wasted if large portions of the money are misappropriated. This would result in new debt without generating new growth.

The situation regarding social security systems is very critical: "Non-wage labor costs threaten to spiral out of control. This burdens craft businesses as well as their employees. What's needed is a major overhaul and the courage to make difficult decisions. We must return to the 40 percent limit for social security contributions – ideally via a safeguard enshrined in the Basic Law," Ehlert emphasized.

Successes at the state level

At the state level, the skilled trades have achieved some successes. These include the introduction of the master craftsman bonus, the improved state building code, the simplified building permit authorization, and investments in inter-company training centers. However, there is also a need for action. The planned law on securing collectively bargained wages will create new bureaucracy, weaken the negotiating parties, and discourage businesses from bidding on public contracts.

Regarding property tax, the recent ruling by the Gelsenkirchen Administrative Court confirms the criticism from the skilled trades sector regarding split tax rates for residential and commercial properties. "The state government should take this ruling as an opportunity to revisit the botched property tax reform – a simple and transparent area-based model would be the better approach."

Craftsmen reject packaging taxes

The skilled trades fundamentally reject municipal packaging taxes: "They create enormous bureaucracy with superfluous detailed regulations and primarily affect medium-sized companies in the catering and food trades. North Rhine-Westphalia should follow Bavaria's example and ban such levies statewide."

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