“Still going pretty well,” concludes Ullrich. In the quarterly economic survey of the Freiburg Chamber of Crafts, 58.5% of the surveyed companies reported good economic conditions in the second quarter of 2022. Only 5.5 percent. reported bad values.
Individual craft industries align in their assessments of the situation – the major construction and finishing industries, which have been the driving force in recent years, are losing percentage points, while the automotive and health industries are almost on par. Service providers and food retailers are also less and less affected by the long-term negative effects of the coronavirus.
However, the prospects for the coming months are assessed much worse by almost all sectors than a year ago. Not every fifth respondent (19.6%) expects an improvement in the business situation. In turn, the percentage of those who expect a deterioration in their company’s development has doubled during the year – from 5.3%. in mid-2021 to now 11.8 percent.
Noticeably cloudy expectations regarding orders
“The uncertainty in our companies is clearly increasing,” says Dr. Handirk von Ungern-Sternberg, member of the board of the chamber. “The situation with the orders of commercial companies from the south of Baden is somewhat cloudy.” One-third of companies (32.7%, a year earlier: 44.9%) recorded an increase in orders, 18%. : 12.4%). This means that the procurement situation is assessed worse compared to the national average in regional industries. Capacity utilization remained high in most companies. Only 16.1% of the surveyed companies reported significant spare capacity, 42.8% reported full capacity utilization, and 16.7% were working above their actual capacity cap.
Order expectations clearly clouded over. Only 19.8 percent. expects an increase in orders in the coming months (previous year: 35.1%). On the other hand, 21.9 percent. companies expect a decline in the number of orders. This value has tripled compared to the previous year – in mid-2021 it was 7.1%.
Sales and prices continue to rise
Sales in southern Baden continued to grow in mid-2022: 39.7 percent of companies saw sales increase in the second quarter of 2022 by 9.9 percent. of companies recorded a decrease in sales – only by half less than in the previous year.
“But purchase prices continue to rise,” reports von Ungern-Sternberg. “And that still holds true for all industries.” 93.4% of all companies reported higher purchase prices. “Of course, this clearly reduces the profit.” Even so much that after a few months of such increases, more and more companies have to pass on the increases. Almost two-thirds of the surveyed companies (64.0%) said they had raised their selling prices.
Investments are limited
Uncertainty in the markets now also has a negative impact on the willingness to invest in artisanal factories. Overall, the willingness to invest in skill-intensive industries is declining. Only 11.3 percent. companies informed that they increased the investment budget, and 19.1 percent. the surveyed companies invested less than before.
“The current tensions across the globe – from inflation to energy prices, availability of materials and interest rates to the gas problem – make future development extremely difficult for our companies to quantify,” explains Chamber President Ullrich. “Uncertainty is never good for the economy.”