Jörg Dittrich, President of the Central Association of German Crafts (ZDH), has called for further reforms during the autumn to alleviate the burden on companies. Speaking to the “Frankfurter Allgemeine Zeitung”, Dittrich acknowledged that the federal government had made positive initial steps before the summer break, but insisted that these measures must be implemented quickly. However, he stressed that these existing initiatives alone will not achieve the necessary impact, and additional reforms are urgently needed in the coming months.
The primary request from the craft sector’s president is a reduction in ancillary labor costs. He stated that these expenses particularly affect traditional crafts because the wage component, averaging 60 percent, is significantly higher there compared to other sectors. Dittrich noted that every percentage point increase in social security contributions translates to approximately 20 billion euros-funds needed by employees and businesses alike. He pointed out that while the current rate is three percentage points above what he considers the red line of 40 percent, the sector must return to that lower threshold.
In other news, the ZDH recently published the findings of its latest economic survey, which involved over 6,000 craft businesses. According to the report, the sentiment in the second quarter has worsened once again compared to the previous year. The business climate index for the craft industry-which reflects the operational situation and expectations of these businesses-plunged to a level as low as it was during the pandemic year of 2020. Dittrich described this as emblematic of a generally worrying situation within the craft sector.
This negative mood stands in stark contrast to the improved confidence among executives in other German companies. The business climate index, published by the Munich-based Ifo Institute and based on surveys of around 9,000 managers, rose for the fourth consecutive month in August.
Dittrich critiqued the government’s previous efforts to introduce relief, such as the planned reduction in corporate tax, arguing that these attempts have failed to benefit the craft sector. He noted that three out of four craft businesses did not gain from these initiatives because they are taxed as sole proprietorships under income tax regulations. Furthermore, the proposed reform of income tax is also falling short of the craft industry’s expectations, with changes that are neither noticeably easing the burden nor, in some cases, adding further strain.
The ZDH represents the interests of approximately one million craft businesses and nearly six million employees across Germany. Dittrich, who owns a roofing business in Dresden, has served as president since 2023 and was re-elected for a second term by the ZDH general assembly in December.
