The reintroduction of the master craftsman's certificate requirement for some trades has also impacted the number of new businesses. (Photo: © gwolters/123RF.com)
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19 January 2021
During the coronavirus crisis, fewer skilled tradespeople became self-employed than before. The reintroduction of the master craftsman's certificate requirement also had an impact, according to a study cited by the German government.
The coronavirus crisis and the government measures have had significant consequences for the skilled trades. These include not only losses in revenue or total shutdowns in sectors such as trade fair construction or parts of the food industry, but the pandemic has also negatively impacted business start-ups.
The Federal Government confirms this in its response (19/25740) to a parliamentary inquiry from the FDP parliamentary group. It refers to a study by the Institute for Craft Economics at the University of Göttingen. However, the reintroduction of the master craftsman's qualification requirement for some trades also played a role.
The study lists the sectors in which new businesses were established or closed due to business closures. It visualizes this using entries in the trade register. The results show that new registrations in 2020 were significantly lower compared to the same periods of the previous year : from March to August, the decrease was 14 percent, and from January to August, it was 8 percent. At the same time, a recovery effect in the number of registrations is evident after the sharp decline in April.
The study breaks down the number of new businesses with specific figures according to Annexes A, B1 and B2 of the Crafts Code for the past five years, each year as of June 30th.
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The Chambers of Skilled Crafts in Germany - HWK Trier
Operations management
A further special feature of the situation in 2020 is the fact that the master craftsman requirement has been reintroduced in twelve trades since this year: Trades that were previously exempt from licensing are now subject to licensing, which has led to changes in the entries in the trade register.
According to the study, the decline in registrations could be seen to a considerable extent as a reaction to the reintroduction of the master craftsman requirement: Compared to the same period last year (March to August), the number of registrations in the trades that were reinstated as requiring a master craftsman qualification fell by 70 percent.
Trades A , which have been subject to mandatory licensing since 2004, show a 7 percent decrease in registrations. No negative trend is observed for trades listed in Annexes B1 and B2 ; in fact, the registration figures for 2020 are higher than those of the previous year.
However, the analysis by economic sector shows that the overall effect is not solely due to the amendment. The sharpest decline (March-August 2020 compared to the same period of the previous year) is recorded in the finishing trades (minus 33 percent). Fewer registrations are also evident in unaffected sectors such as food (minus 25 percent), healthcare (minus 13 percent), and automotive (minus 10 percent). In the construction industry (+/- 0 percent) and in trades serving private (minus 3 percent) and commercial needs (plus 1 percent), hardly any differences are discernible.
On a positive note, however, there were significantly fewer deregistrations from the Chambers of Skilled Crafts registers in 2020, at minus 21 percent, compared to the previous year. The sharpest decline in deregistrations was even found in the group of trades that had been reinstated as master craftsmen: minus 35 percent. The groups of trades listed under Annex B1 (minus 27 percent), B2 (minus 22 percent), and A (minus 18 percent) also showed significant decreases.
According to the study, the significantly reduced number of events can be attributed primarily to government Corona aid , and only secondarily to the amendment of the Crafts Code.
The COVID-19 pandemic had a significant impact on vocational training and continuing education in the skilled trades. In March and April 2020, classes at vocational schools and chambers of commerce training centers were suspended, while master craftsman courses were paused and examinations postponed. Overall, this led to changes in enrollment numbers for courses preparing for the master craftsman examination, which in turn is likely to affect future business start-ups in the skilled trades.
Government response and study in full: Read the > response from the Federal Government here and > the IfH study here
Source: German Bundestag/ Institute for Crafts and Trades
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