Crafts under pressure: Weak demand and difficult financing

The skilled trades sector continues to suffer from declining demand, a difficult credit situation, and high costs. Investments remain subdued, and improvements are urgently needed. This is the finding of a survey conducted by KfW.

The skilled trades sector continues to face economic pressure , according to a business survey conducted by the KfW banking group . Declining demand, more difficult access to credit, and high costs are hindering investment – ​​even though the need is significant. For businesses to be able to invest again, less bureaucracy, reliable framework conditions, and better financing options are needed.

The survey took place from the beginning of March to the end of April 2026 and covered the twelve months prior to this survey. 883 companies Participants came from the skilled trades, representing 56,6 percent of the KfW sample.

The results show: Almost half of the companies records a Decline in demand, only ein funftel reported by rising Demand. Suppliers to commercial businesses are particularly hard hit: 56,2 percent report declines, while only 16,4 percent expect an improvement in the next twelve months.

Equity and rating declining

Around a third of craft businesses report a deteriorating equity base , while only one in five improves its starting position. Consequently, the credit ratings of many businesses are also worsening. Nearly a quarter receive a lower rating, but only around 13 percent are able to improve. Remarkably, 16,9 percent do not know their credit rating – the larger the business, the better the knowledge. Businesses with a downgraded rating are almost three times more likely to experience problems obtaining credit than those with an improved rating.

Obtaining credit becomes more difficult

For the first time in the survey, more craft businesses report that their access to credit is difficult (26 percent) than easy (22 percent). The main reason is increased interest rates , followed by the time and financial burden of the application process and increased collateral requirements. Demand for loans has fallen by ten percent compared to 2024.

You might also be interested in:

Operations management

Founding and acquisition: Your courage counts for the future

Operations management

Craftsmen demand practical guidelines for metal processing

Operations management

Efficiency House 55-Plus: Federal funding runs longer

Sustainability plays a less significant role

Sustainability plays a role in loan negotiations for just under a fifth of craft businesses seeking credit – a slightly declining trend. Information on electricity and energy consumption, as well as the share of renewable energy sources, is particularly requested. Companies with more than 50 employees are more frequently affected.

Investments remain at a low level

Less than half of craft businesses have invested in the last twelve months – ten percent less than the average for the overall economy. Replacement investments are the main focus, followed by digitalization and expansion investments. The biggest obstacles are the general economic situation, high costs for energy, materials, and wages, and a lack of equity capital. Almost 90 percent see a need for investment, but less than half are planning to invest.

Businesses wish Above all, less bureaucracy, cost relief, better financing and reliable policies.

KfW Business Survey 2026 Here you can find all the survey results. 

DHB now also available digitally! Simply click here and register for the digital German Crafts Journal (DHB)!