Activity stagnated in the second quarter and even declined in the construction sector, Oberweis lamented. In addition, businesses are increasingly struggling with high energy and raw material costs, including price hikes of 100% for sugar, 86% for flour, and 93% for wood. Due to the last wage indexation, salaries have also increased, and the National Institute of Statistics and Economic Studies (STATEC) expects new wage indexations to be triggered in October 2022 and April 2023, the President of the Chamber of Skilled Trades and Crafts stressed.
According to Oberweis, the businesses’ financial reserves are “severely weakened,” as they had already been by the Covid-19 pandemic, despite the government’s financial aid.
“At the moment companies are reluctant to invest and customers hesitate to place orders,” Oberweis explained. As a result, according to the president of the Chamber of Skilled Trades and Crafts, the general mood is pessimistic, and the sector even fears a recession.
Responding to those who like to point out that craft sector companies are almost struggling to keep up with demand, Oberweis stressed that this “should be put into perspective”. Oberweis acknowledges that the number of orders increased during the pandemic, in part because staff shortages meant that many orders could not be completed.
However, many businesses are currently dealing with the issue of clients wanting to save money due to the energy crisis and thus cancelling orders, according to Oberweis.
The craft sector expects the parties involved in the upcoming tripartite meeting to fight against a potential recession while also ensuring job security, but above all, the meeting “must not be exploited for electoral purposes,” Oberweis warns. “Each additional wage indexation would cost the craft industry between €70 and €80 million,” according to the President of the Chamber of Skilled Trades and Crafts.
The Luxembourg Employers’ Association (UEL) will represent the craft sector’s proposals during the tripartite, but the sector is already clear that it cannot afford another wage indexation. However, Oberweis also stressed that the craft sector is not questioning the system itself.
