Survey on the mood of the surface finishing industry

The VOA surveyed its member companies about the current economic situation at the turn of the year 2022/2023: energy prices, inflation, shortages of materials and raw materials, and labor shortages are all affecting the industry.

Exploding gas and electricity prices, uncertain energy supplies, a sharp rise in inflation, shortages of materials and raw materials, labor shortages - the German economy is facing difficult tasks for the year 2023. As part of the industry, the surface finishing sector is also affected. The Verband für die Oberflächenveredelung von Aluminium e. V. (VOA) surveyed its member companies at the turn of the year 2022/2023 to obtain a meaningful picture of the current, economic situation. The results serve as a basis for the assessment within the VOA as well as the personal exchange with politicians and business representatives in order to clarify the situation of the industry and to advocate for the interests of surface finishing.

The VOA informs the political leadership in Berlin in regular talks about what moves the surface finishing industry, and has also written several incendiary letters to the federal government. At present, the energy crisis in particular is dominating the thoughts and actions of VOA member companies. Eighty-two percent of members said their production is limited by its effects. The consequences of the war are affecting 41 percent of the companies. Worldwide supply bottlenecks, caused by a variety of geopolitical risks, affect 29 percent of members.

Currently, the economy is in a weak phase. High prices are weighing on consumers and companies, and inflation is slowing down consumption and investment by businesses. Even the construction industry, which has not been slowed down by the Corona pandemic in recent years, is now heading for a crisis: interest rates and construction costs are rising, investors are holding back, and projects are on hold for the time being. There are fears of repercussions for companies in the surface finishing industry, the majority of which work for the construction sector. Although sales development remained the same at 47 percent of VOA members compared to the previous year and 41 percent report an increase of 19 percent, these figures should not hide the serious situation: Capacity utilization fell to an average of 81 percent at 53 percent of member companies, a drop of 9 percent compared with the previous year. Orders received also fell at 41 percent. In addition, restrictions on industrial production are still to be expected, particularly in energy-intensive sectors such as surface finishing, due to the rise in costs. The increased prices are already having a significant impact on 77 percent of members, and 17 percent even see them as a threat to their existence. Expectations for 2023: 59 percent of members expect a positive to moderate development for their companies, 41 percent see the near future as negative to very negative.

"When looking at policy measures to ease the burden on businesses, we see both light and shade," says VOA Executive Director Dr. Alexa A. Becker. It is true that companies are benefiting from the elimination of the EEG levy, the planned extension of the peak compensation for electricity tax and the postponement of CO2 pricing; but the "energy cost curbing program", which is supposed to make subsidies possible for companies, is very bureaucratic and involves a lot of effort, she says. In order for there to be tangible relief for the economy, the measures adopted by the federal government to date should be implemented swiftly and in a way that is friendly to business and companies. Parallel to the talks with politicians and business, the association intensified the activities of the VOA project group "Energy", offered video conferences with qualified speakers, created practical action aids for companies, for example on the possibilities of energy saving, and much more.

The omnipresent shortage of skilled workers is another challenge: In view of the energy crisis, it took a back seat somewhat, although it is already being felt by 59 percent of member companies, 25 percent more than in the previous year. At the same time, the surface finishing industry is making enormous efforts to counteract the labor shortage. 65 percent of member companies provided training in 2022, and 82 percent are planning to do so in 2023. With the help of its training initiative, the VOA is putting the topic on the agenda vis-à-vis politicians, industry and the media. The developments in the legal adjustment of skilled labor immigration are to be welcomed. The opportunity residence law, which came into force on January 1, 2023, sets an important course for integration and for securing the demand for personnel. In addition, the association offers information events for members in addition to its sought-after continuing education seminars. Dr. Becker sums up, "We are making all efforts with great commitment to the industry, because we see our companies on the right path to offering the outstanding quality of surface-finished products on the global market in the long term."

Turbulent times lie ahead, which must be mastered together. The VOA has been proactively advocating for its members for 60 years, facing global challenges in a network and in cooperation with politicians and associations. (OM-1/23)