Crafts: Sales weak, insolvencies at a ten-year high

The skilled trades sector remains under pressure: a lack of orders, rising costs – and insolvencies have reached a ten-year high. Businesses are cautiously optimistic for the current year, reports Creditreform.

Lack of orders, rising costs, and a significant increase in bankruptcies continue to put pressure on the skilled trades. While sentiment has improved slightly after last year's historic low, the sector is still far from a sustainable turnaround. Staff reductions and unresolved succession issues are also burdening many businesses – according to reports. CreditreformThe business information agency from Neuss presented its study on the "Economic situation and financing in the skilled trades" at the International Trade Fair for Skilled Trades in Munich.

Sales remain weak

Photo: © Creditreform

According to the report, the mood in the skilled trades sector has only improved slightly after reaching a 15-year low last year. Many businesses continue to suffer from the consequences of the economic crisis. "Without debt-financed stimulus measures, Germany would have slipped back into recession in 2025. There is no sign of a genuine economic turnaround," explains the report. Patrik-Ludwig Hantzsch, Head of Creditreform Economic Research.

In recent months, negative sales reports have predominated. 25,5 percent of businesses experienced a decline in revenue. While this figure was slightly below the previous year's value of 26,9 percent, only 22,2 percent of companies recorded an increase in revenue. According to the study, the skilled trades sector barely benefited from the rise in consumer spending in Germany.

Hopes for a recovery in order volume in consumer-facing sectors such as the service industry did not materialize. At the same time, the weak industrial economy hampered the supply chain for craft businesses.

Sales in the food processing sector were particularly weak, with negative assessments clearly predominating. The trades serving commercial needs also struggled with declining added value. 

In the construction industry, sales increases and decreases were roughly balanced, while the finishing trades also reported declining sales. Only the automotive sector and the service trades saw a net positive sales trend – although even there, sales were down compared to the previous year.

Bankruptcy cases at a ten-year high 

Photo: © Creditreform

The number of insolvencies among craft businesses rose by 13,3 percent in 2025, reaching 4.950 cases – the highest level in more than ten years (2024: 4.370). This increase was thus more pronounced than the overall economic average. "Energy, materials, wages – costs are spiraling out of control. Without sufficient reserves, many businesses quickly find themselves in dire straits. Business closures, a lack of successors, and rising insolvency figures vividly illustrate this," said Hantzsch.

The persistently weak economy is increasingly impacting the Labor market noticeable. At the end of January 2026, the number of unemployed reached its highest level in about ten years.

The reduction in staff also continued in the skilled trades: 22,1 percent of businesses reduced their workforce, while 20,6 percent hired additional employees. Hantzsch: "The skilled trades have been cutting jobs for three years now. This pace of reduction was last seen 20 years ago. A weak economy, an aging workforce, and a shortage of young talent are all simultaneously impacting the backbone of the sector."

Cautious optimism for 2026

For 2026, many businesses anticipate a slight recovery in sales. 27,0 percent of companies – more than in the previous year (24,3 percent) – expect an increase in sales. At the same time, 18,4 percent anticipate declining sales (previous year: 22,8 percent). 

Photo: © Creditreform

The construction and finishing trades, in particular, are showing more optimism. Despite the improved forecasts, only moderate growth is expected overall, as the economic environment remains challenging in many sectors.

However, businesses' willingness to invest declined: 47,0 percent are currently planning investments, compared to 49,2 percent last year. Higher equity ratios: In the skilled trades, the proportion of companies with strong equity is increasing. 26,8 percent of companies reported a high equity ratio – the best figure since 1998. At the same time, around one in three businesses (32,8 percent) still has an equity ratio that is too low, below ten percent. The construction industry and the food trades are particularly affected.

"Equity is the crucial safety net in the skilled trades. Those who strengthen their earning power become more independent from banks and debt capital," reports Hantzsch.

Succession often remains unresolved. 

Photo: © Creditreform

Traditional family business succession is becoming less common. However, solutions outside the family – such as transferring ownership to senior employees or selling to other companies – are often difficult to implement. This threatens to lead to more business closures.

➡️ For 50,5 percent of businesses, a family succession in question (2018: 55,0 percent). 

➡️ In second place, with 40,6 percent, is the Transfer to employees or co-owners (2018: 38,9 percent).

➡️ One Sale to external parties is considered by 38,2 percent (2018: 35,3 percent).

➡️ At the same time, the proportion of businesses that have a closure Consider. One in six businesses (16,8 percent) is likely to cease operations – in 2018 it was only 12,0 percent. 

The time for handover is also drawing closer: 24,4 percent of business owners want to retire within the next three years, while another 57,6 percent plan to hand over the business within three to ten years.

Source: Creditreform

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