Economy & Politics

Crafts are still not out of the woods

The sector rocked but did not sink into the Covid storm. However, to ensure the viability of a number of businesses, the Chamber of Trades asks the government not to abruptly cut its aid.



The sector rocked but did not sink into the Covid storm. However, to ensure the viability of a number of businesses, the Chamber of Trades asks the government not to abruptly cut its aid.

How to see the glass: half full or half empty? Because, at the start of this second year marked by the impact of the Covid crisis, the situation of the craft industry appears to be quite contrasted. Of course, the sector matters more companies today (8.031) than at the start of 2020, but it must have considerably downsize in terms of job creation (53% less than in 2019). Even harder to bear: 80% of craft companies lost between 14 and 35% of their turnover from one year to the next.

12.9. Gucci / 7 rue Phillippe II / Konkurs Foto: Guy Jallay

Feared since the start of the epidemic, bankruptcy affected 70 companies in February. On the other hand, liquidations have increased by 68% since 2020. Figures that could still change as soon as the aid ends, according to Statec.

These figures, the president of the Chamber of Trades did not fail to detail them, Monday, during a meeting with the Minister of Middle Classes. A Lex Delles (DP) who could only subscribe to the concerns of the sector which, for 89% of companies, only managed to get by by resorting to state aid, “a breath of fresh air” .

Thanks to the whole range of aid from elsewhere: from partial unemployment to indemnities for the self-employed, from the guarantee of loans by the State to repayable advances. Without forgetting this last aspect (which has been the subject of so much debate) of the coverage of uncovered costs.

No doubt therefore: these ” parachutes ” clearly made it possible to avoid crashes. And today, 51% of respondents say their business “is still healthy.” But it is especially the remaining 49% on which it is necessary to always take care, alerted Tom Wirion. The director of the Chamber of Trades recalling that the weakening of the order book, the liquidity problems, the shortage of manpower in certain specialties or the increase in costs now penalizing the construction or mechanical sector constituted a worrying reality in the first half of 2021.

And if Lex Delles or his supervising minister Franz Fayot (LSAP) lacked ideas for “the post-crisis”, Tom Wirion took charge of advancing the craftsmen’s proposals. Starting with a gentle phasing out of public aid measures.

Because cutting the tap of support too abruptly could prove to be detrimental at the present time, estimates the Chamber of Trades. Just as the government is called on to be concerned about “side effects of the pandemic” such as rising material prices and supply difficulties. Two additional problems which are beginning to slow down several areas of Luxembourg activity.

The additional effort in the support granted since May by the government to individuals wishing to improve the thermal efficiency of their homes is bearing fruit.

The Chamber also wishes to see “accentuate support for the entrepreneurial spirit”. In particular via the “elimination of inequalities between the status of the self-employed and that of employee”, a subject which had opposed employers and Minister of Labor last year. It is also a question of relaunching administrative simplification or setting up an “SME Climate Pact”, in order to help small and medium-sized craft enterprises to participate in the energy transition and the sustainable development of their activity.

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