Craft President warns of a wave of bankruptcies



Dhe President of the Central Association of German Crafts (ZDH), Hans Peter Wollseifer, demands rapid state aid for companies in view of price increases. The situation has worsened dramatically, especially for energy-intensive companies, he told the German Press Agency in Berlin. "Many are now up to their necks in water," says Wollseifer. "And these companies will go under if they are not quickly thrown a lifebelt of direct and unbureaucratic hardship aid."

Delayed measures were not enough, emphasized Wollseifer. “In order to prevent a wave of bankruptcies in the trades, the support must come now. And it must be easy for the affected companies to apply for it.”

In a current survey by the ZDH on the consequences of the Ukraine war with several thousand participants, 87 percent complained about disrupted supply chains and increased procurement prices. Existing orders would become uneconomic: 70 percent of the participants stated that they actually made losses with orders. "Many companies simply lack the means to survive such a dry spell," warned Wollseifer.

"Hardship assistance must be implemented quickly"

The vast majority of companies (88 percent) reported increased costs for electricity and heat since the beginning of the year, by an average of 62 percent. According to the survey, this is a problem particularly in the food and automotive trades. Only very few were able to pass all of the cost increases on to their customers. 70 percent stated that they were at least partially able to do this, and 27 percent not at all. This is due, among other things, to the lack of willingness on the part of customers to pay, the commitment to existing contracts and strong competition from competitors.

Wollseifer called for greater use of so-called price escalation clauses in public contracts. These make it possible to subsequently adjust prices for goods or services to reflect increased costs. While the federal government requires the use of construction contracts as widely as possible, the use in the federal states and municipalities is still patchy, the ZDH determined. According to the association, more flexibility is also needed with regard to completion deadlines.

In none of the ZDH special surveys would so many companies have participated as this time with almost 4,200 participants, according to the association, not even during the corona pandemic.



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