German Handcraft Sector Faces 15-Year Low in Business Confidence

Rising insolvencies, declining revenues, and labor shortages challenge the handcraft industry, but signs of stabilization emerge.

The German handcraft sector's business confidence index has dropped to 45.8 points, its lowest level in 15 years, reflecting ongoing economic challenges.
Insolvencies in the industry rose by 18.9% in 2024, with 4,350 cases reported, marking the highest level since 2016, particularly affecting construction-related trades.
Declining revenues and tightened profit margins have led to job cuts, with 80,000 fewer employees reported in the sector last year.
Labor shortages persist, with over 125,000 open positions reported, and the actual demand for skilled workers estimated to be significantly higher.
Despite difficulties, nearly 25% of businesses expect revenue growth in 2025, and investment activity has reached its highest level in years, signaling cautious optimism for the future.