Luxembourg now has 100,000 artisans

If the craft industry has been able to recover well after the health crisis, the challenges of recruitment, the rise in the price of materials but also the risk of shortages hang over the sector.


Laura Banner

If the craft industry has been able to recover well after the health crisis, the challenges of recruitment, the rise in the price of materials but also the risk of shortages hang over the sector.

“Sailing by sight in a sea of ​​uncertainty.” This is the definition that the Chamber of Commerce has given to the challenges that craftsmen face. Next Tuesday, April 26, it was time to take stock for the sector, by means of a presentation of key figures. A situation that should definitely be positive, despite the health crisis that has shocked most companies.

13.04.2022 Interview Tom Oberweis, President Chamber of Commerce, Luxembourger Handwerk, Photo: Marc Wilwert / Luxemburger Wort

Despite the ongoing crisis, the number of craft businesses is growing, but Tom Oberweis believes the real challenge is yet to come.

For example, craftsmen are more numerous than ever. In 2021, the sector employed 102,500 people, 4% more than in 2020, while the number of companies grew by 5% to 8,450. This is a favorable development that can mainly be attributed to the government’s stimulus measures. Compared to the national economy, craftsmanship weighs heavily: 20% of total employment and 21% of companies.

But behind this job growth are more complicated realities, including a chronic labor shortage. Although it needs a skilled workforce more than ever, the craft industry is struggling to recruit.

Many companies feel trapped between a rock and a hard place.

Chamber of Commerce

The pandemic is not only causing workers absenteeism due to covid-19 contamination, but has also led to a shortage of certain materials, such as wood and metals, and consequently to a significant increase in their prices. And this inflationary trend will not stop, much to the regret of companies in the sector, the war in Ukraine which in turn leads to an additional rise in prices.

Added to the skyrocketing energy costs are the personnel costs associated with the tight index tranches and the pressure on wages due to the labor shortage. It is clear that “many companies feel trapped between a rock in the surf”, says the Chamber of Commerce, warning of a possible deterioration in the competitiveness of Luxembourg companies.

Sustainable craftsmanship

Another issue raised by industry professionals is the issue of public procurement. The volatility of the material prices hinders the submission of offers by companies, which have a hard time estimating the price evolution.

Although the next automatic pay increase is due in the spring, some Luxembourg companies fear this deadline. The craft sector fears that it will not be able to compensate the index with an increase in turnover.

Although the Ukrainian crisis offers little prospect of a solution in the short term, the sector is finally warning of depleted financial reserves, which could lead to a future wave of bankruptcies and layoffs. This, even if the ambitions of craftsmanship are not lacking, especially with regard to the energy transition theme.

Exacerbated in the public debate over the war in Ukraine, the industry’s reliance on fossil fuels remains a key lever for controlling operating costs. A study by the Chamber of Commerce in the third quarter of 2021 shows that gas and heating oil are mainly used by craft companies in their production process (74%) or for heating (80%). The same study found that while many companies wanted to improve their carbon footprint, they needed advice first.

Guidance provided by the Climate Pact for Business, a government initiative aimed at supporting professionals in this necessary change to combat global warming. Professionals can also call on a recognized advisor to benefit from tailor-made assistance, subsidized via a voucher up to a maximum of 5,000 euros by the government.

For Tom Oberweis, President of the Chamber of Commerce,

Economy, energy, social, Luxembourg will have to innovate politically to maintain its attractiveness. This is in any case the opinion of the Federation of Craftsmen and the Chamber of Commerce.

“Traditional businesses have a double function. On the one hand they can decarbonise their internal processes and on the other hand they contribute significantly to the energy transition of our society through their work, for example through energy-efficient constructions and renovations”, emphasized Lex Delles, Minister of the Middle Class.

Craftsmanship therefore wants to position itself as an important player in decarbonization and sees this sustainable approach as the “only one that makes business activities more sustainable”, concludes the Chamber of Commerce. Sustainable crafts will also move through the digitization of companies, but also through continuous investment in the skills of employees.

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